Why Abra’s new ‘ETF’ cryptocurrency token is far more complicated than it sounds

Coinbase isn’t the only one trying to make cryptocurrency easier to invest in.

Cryptocurrency exchange and wallet provider, Abra, has launched a new investment token to help upstart investors get into the cryptocurrency game, without actually having to buy any cryptocurrency.

Abra’s exclusive new token, the BIT10, helps Abra users to invest in the top 10 cryptocurrencies of the month.

Importantly, when a user buys a BIT10 token they are not actually buying any cryptocurrency, but rather a kind of synthetic exposure to the cryptocurrency market.

Let me explain.

The BIT10 token will track the top 10 cryptocurrencies every month. As the market value increases, so does the value of the token. Equally, when the market value goes down, so does BIT10’s value. There are no promises of returns.

While Abra’s announcement suggested that the BIT10 is similar to an index, security, or exchange traded fund (ETF) Abra CEO Bill Barhydt, has since stated that it is not.

BIT10 tokens can be bought for as little as $5, with no extra fees. The amount invested dictates the token’s value and owners can sell their tokens when they please. But the BIT10 is exclusive to Abra, you can’t trade this token outside of the Abra app.

Tokens are secured in the Abra wallet with a private key, and verified by the Bitcoin and Litecoin blockchains using a form of basic smart contract called pay to script hash (P2SH).

Like the new Coinbase Bundles , the BIT10 token is weighted to spread your investment across the market. BIT10’s weighting appears – for the most part – to follow cryptocurrencies based on market cap.

However, this isn’t entirely true. The BIT10 token was devised in collaboration with Bitwise Asset Management which actively controls the selection of 10 coins that feature in the BIT10 token.

According to Abra, once a month Bitwise Asset Management will adjust these 10 coins and their associated weightings, based on changes in everything from market cap to new regulations that might affect a coins value.

While you are investing in a token, you are also investing your trust in Bitwise Asset Management.

As of October 1, most of the BIT10 token is weighted on Bitcoin, followed by XRP, Ethereum, Bitcoin Cash and so on.

The BIT10 might sound like it is making it simple and easy to invest in cryptocurrency, but it is clearly far more complex than that.

As ever, do your research before investing, if you think you’re buying cryptocurrency, be sure that you actually are.

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Moonday Morning: Blockchain & cryptocurrency news you missed over the weekend

Good morning, it’s Monday – or should that be Moonday?

Either way, you know what that means. It’s time for the weekend’s cryptocurrency and blockchain news that we would have covered had we actually been in the office. But we were too busy hodling all weekend to do anything.

Anyway, here it is:

1. From blockchain to blockchan. It appears infamous image board, 4Chan, has started accepting four types of cryptocurrency : Bitcoin, Litecoin, Bitcoin Cash, and Ethereum.

2. It turns out Soulja Boy has been cranking it on Bitcoin and Litecoin recently. On his latest album, “Young Drako,” a track titled Bitcoin talks of how he has earned quite the sum of money from investing in cryptocurrency. It’s a shame it’s such a terrible song, y’know, in my opinion.

3. The mayor of Seoul revealed his $100 million, five-year plan to turn the South Korean city into a blockchain-powered smart city.

4. Members of the US senate have sponsored a bill that aims to deliver tighter sanctions on the Venezuelan Petro . If successful the bill would prevent US residents from providing tech to the Venezuelan government that would help launch the cryptocurrency.

5. True signs of cryptocurrency mass-adoption are here as the series of children’s horror books, Goosebumps, casually drops Bitcoin explainer in one of its latest episodes. Sonny is such a nerd.

6. Yet another blockchain use case from the shipping and logistics world. Spain’s Port of Valencia plans to use blockchain technology to build a “smart port,” whatever that means. Like most uses in this area, it looks like distributed ledger technology (DLT) will be used to track goods through their entire supply chain.

7. Reports are claiming seven cryptocurrency exchanges and 158 wallets have been hacked in South Korea, to date. Ninety-one of the wallet hacks happened this year.

Well, there you have it, that’s the weekend roundup of cryptocurrency and blockchain news. More hacks, more signs of regulation, more rappers rapping about “Bitcoins,” and yet another blockchain-based supply chain. Is it me or is this starting to sound a little familiar ?

If you’re interested in everything blockchain, chances are you’ll love Hard Fork Decentralized. Our blockchain and cryptocurrency event is coming up soon – join us to hear from experts about the industry’s future. Ticket sales are now open, check it out!

Cryptocurrency bulls push Bitcoin price beyond $26,000 (in Iran)

News of Iran’s government legalizing cryptocurrency mining has caused an impromptu Bitcoin bull market. Iranians have clamored to trade fiat for cryptocurrency, pushing the price of Bitcoin to over $26,000 on a local exchange overnight.

Thanks to Iran buddying up to the cryptocurrency mining industry, local sentiment has turned positive. Bitcoin traded for nearly four-times the worldwide market average, as spotted by Bitcoin News.

It really is a cryptocurrency wet-dream: a whisper in the wind (albeit from a world government) causes an explosion in Bitcoin value. There are other factors at play, though. Iran’s currency has been rapidly declining in value, with economists nervous it could suffer rapid hyperinflation that would mirror Venezuela’s spiralling economy.

The dire economic situation, combined with the green-light being given to Iran’s cryptocurrency miners, has seemingly been enough for speculators to picture a world where Bitcoin is more stable and valued higher than the Iranian rial.

A quick check of Iranian exchange desk EXIR shows us that Bitcoin is still being traded at well over $20,000. Note, the amounts are shown in Iranian toman (one toman is the equivalent of 10 rial).

Earlier today, Bitcoin was exchanged at a price of 109,200,000 toman, or 1,092,000,000 rial. At the time, that was equal to $26,000, but as the value of the rial drops further against the greenback, the current maximum price paid for Bitcoin on EXIR sits at around $25,900.

It’s well-documented that prices vary greatly between cryptocurrency exchanges, but what’s interesting is the timing. This has happened simultaneously to a sudden downturn , as the market deals with the threat of whale-dumps and widespread capitulation. Iran has also teased the creation of a state-sanctioned cryptocurrency, much like Maduro’s Petro . The Iranian Bitcoin market is booming despite these factors.

The price of Bitcoin in Iran might not be directly relevant for the rest of the world, but it highlights two things: that the dream is still alive in the places that need cryptocurrency the most, and that how a government feels about Bitcoin on any given day still has great influence over its price, unfortunately.