Basket

When used in the cryptocurrency realm, a basket refers to a collection of digital currencies handled as a unified asset, reducing the need for holders to monitor individual currencies regularly. A crypto basket is also synonymous with a crypto index fund.

Crypto asset baskets gained traction in 2018, beginning with aggregating various currencies and giving a single token to enable trade. Users can trade the token like a conventional cryptocurrency after listing it on an exchange.

Although the product was first designed for inexperienced traders, it now provides features for experienced users. For example, the Coinbase Index Fund is geared for large-scale crypto investors and includes major cryptocurrencies such as Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).

Depending on the guiding concept, a basket can take on a variety of shapes and forms. For example, it may include all of the top proof-of-work (PoW) or proof-of-stake (PoS) cryptos. Others can join together ERC-20 tokens aimed at a certain sector, such as decentralized finance (DeFi).

Other cryptocurrency index funds, such as the JPMorgan Cryptocurrency Exposure Basket, take a different tack. It follows the shares of numerous firms that interact with cryptocurrencies rather than immediately putting together a collection of coins. Microstrategy, Nvidia, Riot Blockchain, and Square are among the firms in its basket.

Notably, the percentages of assets in a basket might vary, with one or two assets assuming the lion's share. In the instance of JPMorgan, Microstrategy receives 20%, Nvidia 15%, and Riot Blockchain 18%.


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