Cryptocurrency index funds can provide investors with exposure to multiple digital assets, lowering the risk that comes with investing in just one type of cryptocurrency.

The risk of this investment method is diminished since it tracks the performance of specific digital assets, which are chosen due to factors like market capitalisation or theme.

The index funds are made up of a variety of coins, which are chosen based on a particular weighting and rebalancing strategy.

While such funds can be an effective investment tool, they might not be suitable for every investor.