Crypto index funds are the financial vehicles that help diversify investments in cryptocurrencies. The process contains a pool of investors from different fields who invest their money in diversified portfolios. The process is similar to the process followed in mutual funds, where the fund manager uses the money to invest in securities.

The difference between mutual and index funds is that there is no fund manager in crypto indexing. Instead, investors generally put their money in a stock market index. Hence, due to their passive management, they often have lower fees and expense ratios, which helps investors and traders manage their assets.