It’s barely been a few weeks and yet another cryptocurrency startup has launched its version of a cryptocurrency “index fund” to try to make investing in cryptocurrency even easier.
Yesterday, Goldman Sachs-backed cryptocurrency service Circle launched its new investment product, “Circle Collections,” – its take on cryptocurrency bundles.
There are three new Circle Collections to choose from: Payments, Privacy, and Platforms. Each collection aims to cater for a slightly different crowd.
Circle has not provided details of what coins are included in each of these packs, however, Circle do give some description of the Payments collection. I tried to download the app to find out for myself, but sadly, it appears to be geo-restricted (we’re based in the Netherlands).
The Payments collection is designed for investors who are interested in, as the name suggests, cryptocurrencies trying to develop payment networks. Think Bitcoin, Bitcoin Cash, Litecoin, Stellar, and so on.
With that in mind, it’s probably fair to assume that the Privacy collection will contain coins that are focused on delivering private and anonymous cryptocurrency payments. I would expect coins like Monero and Zcash to appear in the Privacy pack.
The Platforms collection will most likely contain cryptocurrencies that are tied more to developing a blockchain-based multipurpose platform. Coins like Ethereum and EOS would likely be included in this pack.
Any investment into each of these packs is spread across the coins by market weight. The most valuable coin will receive the greatest portion of the investment all the way to the least valuable coin receiving the smallest portion of the investment.
Circle has not given any details for how this market weighting will be adjusted, if at all. The announcement also does not disclose how the coins in these packs are stored and verified; whether you are actually buying the cryptocurrency, or a market tracking token remains unclear.
Over the last few weeks, we have seen a number of big names in the cryptocurrency world launch similar products.
Coinbase recently launched its “Coinbase Bundles” which contains the top five cryptocurrencies by market weight, and stores each coin in its own Coinbase wallet. With Coinbase Bundles you actually own the cryptocurrency.
Earlier this week, Abra launched its BIT10 “index” style token which tracks the markets performance, appreciating or depreciating in line with the market. With the BIT10 token, investors don’t actually own any cryptocurrency, just the BIT10 token.
It seems “index fund” styled cryptocurrency investments is becoming a bit of a trend. These funds tend to promise greater ease and speed of investment, but remember, there is no less risk.
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