Abra Is Launching a Crypto Token Tied to an Investment Fund

Crypto wallet provider Abra is launching a new token in a bid to offer investors more exposure to the cryptocurrency market.

Investors can purchase the token, which is built on bitcoin, to essentially invest in all 10 cryptocurrencies at once, according to a press release.

Abra CEO Bill Barhydt told CoinDesk that at present, the fund invests in bitcoin, ethereum, XRP, bitcoin cash, EOS, stellar, litecoin, dash, monero and zcash.

Users can deposit bitcoin, litecoin, bitcoin cash or a fiat currency into their Abra wallets and convert funds to the Bit10 token, he added.

"The Bit10 token is 100 percent bitcoin based. It is a single bitcoin collateralized multi-sig wallet. The amount of bitcoin the consumer is holding in the Bit10 token's wallet is automatically adjusted to reflect the USD value of the Bit10 index. Abra is the counterparty to the contract and hedges away counterparty risk on all of its contracts. This is exactly how all of the other synthetic assets in Abra function."

The token works by using smart contracts to peg a user's cryptocurrency or fiat currency holdings to Bit10.

While the token is built on Bitwise's index fund, it is not an exchange-traded fund, an Abra representative said.

The token is similar to an ETF in its ability to grant investors exposure to an index.

Because the Bit10 token is not an actual ETF, it does not require approval through the SEC, the Abra spokesperson told CoinDesk.

Barhydt explained that "The Abra BIT10 token uses the same synthetic asset model as all of the other Abra tokens available in our app. The tokens are held in fully collateralized bitcoin multi sig wallets with the user holding their own keys. As such the BIT10 token is not a security."