What is a Crypto Basket?

Authored by Matt Heater
Matt Heater

Matt Heater

Published March 2, 20222 mins
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A basket is a curated selection of digital assets, giving you exposure to specific sectors of the crypto market. 

Makara offers baskets that cover different investment sectors and themes within crypto. For example, if you see a vibrant future in the Metaverse you can invest in the Metaverse Basket. Or if you are a believer in how crypto and blockchain can change the internet, you can invest in the Web 3.0 Basket. We even have single-asset baskets with only Bitcoin or Ethereum as well as a basket with all Makara assets called the Universe Basket providing the most diversified exposure. 

How Do Crypto Baskets Work?

To start, you allocate your funds into a basket, or baskets, of your choice. We’ll provide you some initial basket recommendations based on your interests and investment goals. 

Once your funds are invested, Makara takes care of rebalancing and reallocating your portfolio for you. 

Rebalancing reduces overexposure to a crypto asset that occurs when the value of assets within a basket fluctuate up and down. The rebalancing process will periodically sell some of the highest-performing assets and buy some of the lowest-performing assets to return the basket to its overall desired weighting. For example, in a basket with only two assets at a 50-50 split, at the end of each quarter, the basket would be adjusted to ensure each asset is 50 percent of the basket.

Reallocation is when the assets in the basket need to change. For example, in a basket tracking the top 10 coins by market capitalization, the coins may have to change as market capitalization changes. 

With a fully managed basket, once your money is invested, you don’t have to worry about fine-tuning it. That’s what we do for you. You can always deposit more funds or withdraw funds from your account. You can even add new baskets to your portfolio at any time. 

To learn more, check out our common FAQs on getting started or browse all Makara baskets.


DISCLAIMERS:

Makara Digital Corporation (“Makara”) is an investment adviser registered with the US Securities and Exchange Commission. Registration as an investment adviser does not imply a particular level of skill or training. Makara exclusively provides investment advisory services related to investing in cryptocurrencies and other digital assets.

Makara is not a broker-dealer, exchange, custodian, or wallet provider, and is not intended for frequent trading activity. Investing in digital assets is highly speculative and volatile and Makara is only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns.

Past performance is not a guarantee of future results. Baskets attempt to provide thematic exposure to different assets in the cryptocurrency sector. Baskets do not contain every existing cryptoasset that fits a particular theme and there is no guarantee that baskets will achieve their investment or diversification objectives. We believe that rebalancing within and among baskets on a periodic basis is an important component of investing in baskets, but this causes transactions to occur in client accounts and may therefore have tax implications and trading fees. Makara reallocates within baskets when it believes there is a good rationale for adjusting the basket’s composition, but there is no guarantee that such reallocation will be a successful decision.

Argonaut Asset Management Inc. (d/b/a “Makara”) is a wholly-owned subsidiary of Betterment Holdings, Inc., and an affiliate of Betterment LLC. The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and cryptocurrency is only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns. Purchases or holdings of cryptocurrency are not FDIC or SIPC insured.

Authored By
Matt Heater

Matt Heater

Matt previously led business development at a boutique digital asset consulting firm and he held a variety of roles at IBM, including as a consultative sales lead within Watson Financial Services. He led operations for the Blackstone Group’s Hedge Fund unit’s London office, and evaluated mutual funds and hedge funds as an auditor at KPMG. Matt earned his MBA from the University of Washington, his Bachelor’s degree in Business-Accounting from UNLV, Lee Business School, and holds the Chartered Alternative Investment Analyst designation (CAIA) and a Series 65 license. Matt is a fan of Michael Mann films, and has a cat named Edie.