The New Abra Token Makes Diverisified Crypto Investing a Breeze
In the cryptocurrency world, there is no shortage of coins and new currencies. Unlike what other service providers have done, Abra is linking this token to the Bitwise 10 Crypto index. Abra, the popular cryptocurrency wallet provider, is issuing its own token.
The New Abra Token Explained
It is extremely uncommon to see new cryptocurrency tokens being associated with an investment fund. Given the growing demand for exposure to all cryptocurrencies, it is only normal service providers look for ways to streamline the investment process accordingly. Simultaneously, one has to wonder why nobody thought of this opportunity sooner.
The cryptocurrency wallet provider is issuing the Bitwise 10 Crypto Index Token, or Bit10. Diversification is key in the cryptocurrency world, and getting people acquainted to this process at an early stage is a smart idea. As the name suggests, this token is linked directly to the Bitwise 10 Crypto Index, which tracks 10 of the top cryptocurrencies by creating a balanced portfolio.
Due to this new token, potential investors only have to purchase 1 asset to effectively set up a 10-currency portfolio. The portfolio will be rebalanced automatically every month, this means investors will always get the perfect combination without having to keep close tabs on their portfolio at all times. It makes it a lot easier for institutional traders, although consumers may also benefit from this new development accordingly.
Considering how these 10 top cryptocurrencies represent the lion’s share of the total market capitalization, the new token will undoubtedly be of great interest. Currencies supported at this time include Bitcoin, ETH, XRP, Stellar, EOS, Dash, Monero, ZCash, LTC, and BCH. That does not coincide with the current top 10 rankings according to CoinMarketCap, though the choices also make a lot of sense first and foremost.
Abra CEO Bill Barhydt explains how the new token is 100% Bitcoin-based. This Bitcoin is collateralized through a multi-sig wallet. An extremely interesting creation which makes investing in various cryptocurrencies a lot more straightforward. Abra is the counterparty and takes care of the counterparty risk on all contracts. The amount of Bitcoin held by a Bit10 owner is adjusted to reflect the USD value of the Bit10 index at all times.
Despite linking this token to the Bitwise index fund, it is not an ETF. Bitwise still has a plan to introduce its own ETF in the future, although it seems unlikely the SEC will approve such vehicles in the near future. There is still an extremely big difference between the two, although this token will execute in the same way to exchange-traded funds.