Crypto Terms: Letter B

What is Basket?

Basket - a service that allows traders to manage a collection of cryptocurrencies as a singular asset.
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Let's find out Basket meaning, definition in crypto, what is Basket, and all other detailed facts.

A basket, also known as a crypto index fund, is used in the context of crypto to describe a collection of cryptocurrencies that are being managed as one singular asset. This reduces the need to closely monitor individual currencies.

Baskets started gaining prominence in 2018. Around this time, it became possible to group several different coins and offer a single separate token during trading. Users could list the token on an exchange platform and trade it as they would with standard cryptocurrencies.

The initial target group of baskets was newcomers to the trading field. The technology has since been developed to provide convenient functionality for large-scale investors. Each basket service offers unique functionality.

Some baskets allow users to manage ERC-20 tokens, while others include a variety of currencies created using the Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus mechanisms.

Some crypto index funds are able to track multiple companies that interact with cryptocurrency at once. The JPMorgan Cryptocurrency Exposure Basket offers this model instead of grouping several cryptocurrencies into a single token. The fund holds Nvidia, PayPal, and Riot in its basket. 

The percentages of the assets in a single basket may vary. In some cases, one or two assets may hold a significantly higher percentage than others.