Coinbase Inc. reported Tuesday that it is launching the Coinbase Index Fund. Digital currencies listed now on Coinbase are Bitcoin, Bitcoin Cash, Etherium and Litecoin.
These currencies are daily traded on the GDAX exchange in San Francisco. This new index will provide customers with better access to a market valued at 450 billion dollars. Every time a new crypto asset is listed on the Fund, the index will automatically be rebalanced to include it.
“We are noticing people coming to the space for the first time, being excited about cryptocurrencies, but not knowing where to start, so we’re excited to give people the ability to get broad exposure to the entire asset class rather than having to select individual investments.” Reuben Bramanathan, a product manager at Coinbase, said, according to Bloomberg. “We’re seeing strong demand from institutional and high-net-worth individuals.”
"The fund will be weighted by market value and follow Coinbase Index, a newly created benchmark of Bitcoin, Bitcoin Cash, Etherium and Litecoin – the digital coins currently available on the exchange. If Coinbase decides to list new assets, they will automatically be added to the index, which will be rebalanced annually."
Clients will be able to invest in the fund once a month and withdraw funds once a quarter.
Initially, only accredited US investors will be entitled to invest in the fund. Attracting investment to less experienced individuals may be a big problem in terms of regulation for Coinbase index fund. Investors need to have a capital in the amount of $ 1 million and an annual income of at least $ 200,000 to be allowed. The minimum investment threshold is $ 10,000. The company hopes to launch an investment mechanism in the coming months.
Earlier an investment company “Grayscale Investments” Inc. announced the launch of four new exchange traded funds (ETF), also tied to the cost of 4 individual cryptocurrencies. This fact doubles the number of possible offers to investors as well as new opportunities for portfolio expansion.
Cryptocurrency market is growing much faster than anticipated, bigger players will start investing huge founding, leaving behind smaller players.