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Goldman-Backed Circle is Selling Cryptocurrency ‘Collections’

Last Updated March 4, 2021 3:46 PM
Jack Mathis
Last Updated March 4, 2021 3:46 PM

Circle Invest announced today the launch of three new collections of index funds for cryptocurrencies.

Divya Agarwalla, Senior Vice President at Circle, posted on the company’s blog that the “Buy the Market” feature “…was so successful that over 30% of our users are taking advantage of it. As CCN.com reported, Circle released this feature in May as a way for customers to buy a market cap-weighted positions in the assets listed on the platform.

Collection Types Is Based on the Coin’s Mission

The three new collections will contain an index of coins based on their main goal/mission: Platforms, Payments, and Privacy. While some crypto-enthusiasts may take issue with the broad categorizations and a clear overlap between them, Circle has picked out coins for each collection.

“Crypto is complicated,” Agarwalla said. “Many projects aim to solve similar real-world problems, but take vastly different approaches to get there,” she added, explaining:

“Projects like Bitcoin, Bitcoin Cash, Stellar, and Litecoin are trying to build superior payment rails based on blockchain technology so that making payments is as easy, instant, and as borderless as sending an email. If customers are passionate about this category of assets and want to invest, they can simply buy the Payments collection. Each of the assets in the collection will be weighted by market cap. Customers will also be able to educate themselves on the collections through our in-product content.”

The option to purchase the collections is now available in Circle Invest’s latest updates of the iOS and Android apps.

Index Fund Funds: Competition Heats Up

Cryptocurrency index funds have gained attention as major exchanges and wallet providers roll out the feature and outdo each other. This is perhaps not surprising given the success that low-fee index funds have had in the equities market.

Coinbase, for instance, launched its own version of a collection fund for retail investors on September 28, but calls them “bundles.” As CCN.com reported, the “bundle” is a market-cap-weighted bundle for the five cryptocurrencies list on Coinbase (Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ethereum Classic). Notably, it has a very low minimum deposit of only $25. This is also in line with index funds offered by mutual fund firms for smaller retail investors: low start-up costs, low (or no) maintenance fees, and low minimum balance.

In addition, Bitwise, a prominent cryptocurrency index fund, filed with the SEC their own ETF called Bitwise10 (Bitwise HOLD 10 Cryptocurrency Index Fund). The fund would include the 10 top largest cryptocurrencies by mark capitalization.

Bear in mind, Circle Invest also only offers 11 cryptocurrencies on its platform, of which the new collections will be comprised. As an official index hasn’t been agreed on yet for cryptocurrencies, such as the DOW or S&P 500, market capitalization remains a guide for these types of coin collections.

Featured image from Shutterstock.