Abra One-Ups Coinbase With ‘Basket’ Crypto Investment Product
Startup To Add Bitwise Crypto Index To Investment App
You may not have heard of it, but Abra, a California-based startup, and its closest business partners are looking to revolutionize how investors allocate capital in the budding crypto market, which is changing, developing, and maturating at a rapid rate. On Wednesday, Bitwise, the startup’s partner, along with Abra itself, dropped quite the announcement, revealing that they had just established “the world’s first cryptocurrency index for retail investors” through Abra’s mobile application, which aims to be a one-stop shop for digital asset enthusiasts from across the globe.
Bitwise, for those who are unaware, is a San Francisco-based cryptocurrency investment service provider that has become well-known for its privatized indexes, which consist of a collection of promising crypto tokens, that are aimed at institutional investors. But now, as alluded to earlier, retail traders, like you or I, will be able to invest in Bitwise’s world-renowned indexes through Abra and its new feature.
According to the firm’s official announcement, published on October 3rd, anyone around the world with access to Abra can now make an investment in the new Bitwise 10 Crypto Index Token, or BIT10 for short. The new token, available exclusively through Abra’s platform, will track 10 of the largest cryptocurrencies by market capitalization that also fit Bitwise’s stringent, rigorous, transparent “index methodology,” which seems to be similar in nature to Coinbase’s well-known, somewhat infamous digital asset framework.
More specifically, in an exclusive interview with CoinDesk, Abra CEO Bill Barhydt listed the 10 crypto assets listed in BIT10 — Bitcoin, Ethereum, XRP, Bitcoin Cash, EOS, Stellar, Litecoin, Dash, Monero and ZCash, which are all well-respected projects in their own rights. So, crunching the numbers, the American fintech startup explained that investors in BIT10 will gain exposure to 80% of the crypto market, a solid amount, to say the least.
However, this could change on the fly, as it was also explained that crypto assets may be rebalanced (add, take out, redistribute) in the portfolio if they do not fit the criteria of liquidity, security, and robustness. Although this process may sound tedious, Bitwise explained that it has been well worth it, as BIT10 has reportedly outperformed Bitcoin (BTC) itself since the creation of the index.
Starting today, “anyone around the world can invest in a crypto index on the Abra app — with a $5 minimum investment, no restrictions on entry or exit timing, and no fees.” Prospective investors in Bit10 will be required to either fund their Abra portfolio by depositing Bitcoin, Bitcoin Cash, Litecoin, or using a credit card or bank wires. But from what it sounds like, the duo are looking to get speculators to replace their traditional cryptocurrencies with BIT10 tokens, which is a better investment vehicle as alluded to by Abra.
Not only is BIT10 designed to be a great investment, but it is also reportedly secure, with “Abra’s successful stablecoin model” allowing the Bitwise to manage BIT10 positions through a multi-signature smart contract system that exists on the Bitcoin or Litecoin blockchain, which should disallow any tampering. Explaining exactly how price movement is tracked, the announcement explained:
Once invested, Abra and the user enter into a smart contract that effectively pegs the asset invested (either fiat currency or cryptocurrency) to the same amount of BIT10 tokens. Abra will get a real-time price feed from Bitwise Asset Management (again according to their published methodology) and the BIT10 investor will see the market moves up or down reflected in the price of their BIT10 tokens.
This news follows the introduction of Coinbase Bundle, which saw the world-renowned crypto platform allow investors to allocate their funds to a basket full of cryptocurrencies, similar to how Bitwise and Abra’s BIT10 product. It is clear that these two new products, from both Coinbase and the duo, were made in a bid to entice consumers to expand their horizons in this industry, despite its infancy.