For investors who lack the time, knowledge, or patience to sift through hundreds of cryptocurrencies, there’s an easier way. Crypto baskets allow traders to snap up a horde of digital assets in one go, without the need to independently manage them. The number of platforms offering token baskets has grown significantly this year. But are they a smart investment for the savvy trader or a niche product best left to newbs?
A Bountiful Basket of Crypto Assets
2018 was meant to be the year of security tokens, or at least that’s what we were promised in 2017. There’s still time for that prediction to be proven correct, but in the meantime 2018’s big token trend is crypto baskets. These comprise curated suites of digital assets, often based around a specific theme, that can be purchased via a single token or on a crypto exchange with a single click.
So far, crypto baskets have been largely geared around “entry level” tokens such as LTC and ETH. Coinbase Index Fund gives investors exposure to all assets listed on GDAX, but since these comprise various weightings of BTC, BCH, ETH, and LTC only, there’s little imagination on display. Nor is there an entry route for retail investors; you’ll need at least $250,000 to buy in. Not all basket-based services are as exclusive though.
One Basket, Many Tokens
On Tuesday June 5, a service called Flipside Crypto released a basket that was created in conjunction with Coinmetrics.io. Its smart contracts basket of the day contained eight Proof of Work coins. At the start of each new day, a new basket is created, with each one rated according to its volatility, developer activity, and other metrics. Dailycryptobasket.com is a novel take on crypto baskets to date, and one which shows there’s scope for originality and innovation in this field.
Set Protocol is a project that’s taking a different approach to serving up collateralized baskets of tokens. Sets of ERC20 tokens can be grouped together using smart contracts and exchanged via a single token. Then there are projects like FCTF (First Crypto Traded Fund), which aims to peg the price of 10 digital assets to a single token. It even enables token holders to profit from fees paid to a Dash masternode in theory.
As a relatively new trading option, crypto baskets have yet to prove themselves or to gain mass adoption. They also face competition from tokenized projects that enable traders to follow the profile of experienced traders and to have their trades automatically emulated, with all profits paid back in the form of yet more tokens. For now, crypto baskets are still viewed as “starter packs” best suited to new traders. With China’s Okex having just launched its OK06 Exchange-Traded Tracker, days after Huobi issued its own basket of 10 tokens, crypto investors will soon be in need of baskets to hold their baskets of tokens.
Do you think token baskets will take off, or are they a niche product best left to novice traders? Let us know in the comments section below.
Images courtesy of Shutterstock, Set Protocol, and Daily Crypto Basket.