Crypto billfold provider Abra is launching a new token in a bid to offer investors more orientation to the cryptocurrency market.
The Bitwise 10 Crypto Index Token (Bit10), cause to grow with Bitwise Asset Management, tracks the top 10 cryptocurrencies by retail capitalization and is rebalanced monthly. Investors can purchase the token, which is develop intensified on bitcoin, to essentially invest in all 10 cryptocurrencies at once, according to a herd release.
This grants retail investors access to “nearly 80 percent of the cryptocurrency demand” at once, the release stated.
Abra CEO Bill Barhydt told CoinDesk that at today, the fund invests in bitcoin, ethereum, XRP, bitcoin cash, EOS, stellar, litecoin, bit, monero and zcash.
Users can deposit bitcoin, litecoin, bitcoin banknotes or a fiat currency into their Abra wallets and convert endowments to the Bit10 token, he added.
The token itself is not a fund, he explained, adding:
“The Bit10 memento is 100 percent bitcoin based. It is a single bitcoin collateralized multi-sig pocketbook. The amount of bitcoin the consumer is holding in the Bit10 token’s wallet is automatically settled to reflect the USD value of the Bit10 index. Abra is the counterparty to the contract and hedges away counterparty jeopardize on all of its contracts. This is exactly how all of the other synthetic assets in Abra gala.”
The token works by using smart contracts to peg a user’s cryptocurrency or fiat currency holdings to Bit10. Bit10’s honorarium will, in turn, move with the performance of those coins.
While the symbol is built on Bitwise’s index fund, it is not an exchange-traded fund (ETF), an Abra emblematic said. However, the token is similar to an ETF in its ability to grant investors risk to an index.
That being said, Bitwise does intend to bid an ETF based on its cryptocurrency index fund, as previously reported. At the time, the flock said it was looking for approval from the U.S. Securities and Exchange Commission (SEC).
Because the Bit10 proof is not an actual ETF, it does not require approval through the SEC, the Abra spokesperson determined CoinDesk.
Barhydt explained that “the Abra BIT10 token uses the just the same synthetic asset model as all of the other Abra tokens available in our app. The surfaces are held in fully collateralized bitcoin multi sig wallets with the operator holding their own keys. As such the BIT10 token is not a security.”
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