Coinbase have announced that they intend to offer a fund for cryptocurrency trading in addition to the opportunities to trade cryptocurrencies directly on their exchange. The San Francisco-based currency exchange launched its Coinbase Index Fund on Tuesday March 6 2018 and its entry into the assets management field means it is highly likely to position itself in financial services or banking in the not too distant future.
Coinbase Index Fund
The index fund will invest into the cryptocurrencies currently invested on Coinbase via the GDAX exchange, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash. In the initial stages, the index fund will only be available to investors accredited in the United States or those with incomes in excess of $200,000 or with $1 million net worth. Coinbase does, however, hope to launch an ETF on similar lines which will be open to any investors.
Reuben Bramanathan is the product lead for the Coinbase Index Fund and he stated that: “We are working towards funds that will be available to all retail investors. We’re expecting huge demand from retail when that’s available and we want to be in a position to accept that demand“.
$10,000 Initial Deposit
He did decline to give anticipated dates for when the retail fund is likely to be available and when the Coinbase Index Fund is officially likely to start trading. Coinbase are currently accepting applications for the Index Fund. Investors need to make a minimum deposit of $10,000. The Index Fund will have cryptocurrency holdings weighted according to market caps and if the Index had been available in the past 12 months, it would have achieved returns of 995%.
Cryptocurrency index funds are also currently available from Grayscale Investments, which was the original pioneer of an index fund for Bitcoin tracking, but now offers a more diversified product which invests in the four coins in the Coinbase exchange and also Ripple XRP. In December 2017 the HOLD 10 Index Fund was launched by Bitwise Asset Management and investments also include Monero, Stellar and Dash. Currently, however, none of these products are available to retail investors as the SEC is withholding approval, pending concerns regarding price manipulation and security.