Key Takeaways
- • Coinbase announced the Coinbase Index Fund, a market-cap-weighted cryptocurrency index fund, according to Mashable's report on the company's Tuesday announcement.
- • The fund gives exposure to the four assets currently listed on Coinbase's GDAX exchange: Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
- • Access is limited to U.S.-resident accredited investors, and the fund charges an annual management fee of 2%.
- • The fund is accepting applications and accepts U.S. dollars as well as cryptocurrency; no trading start date has been announced.
- • Coinbase also introduced the Coinbase Index, which uses GDAX price data and is reconstituted whenever a new asset is listed.
Summary
Coinbase, one of the largest cryptocurrency exchanges in the world, announced on a Tuesday that it is launching an index fund for cryptocurrencies, according to Mashable. The Coinbase Index Fund (CIF) is a weighted average fund that ranks digital assets by market capitalization. It gives investors exposure to all assets listed on Coinbase's GDAX exchange, which at the time of the announcement comprised just four cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
The CIF is currently open only to U.S.-resident accredited investors and is accepting applications. The fund charges an annual management fee of 2% of assets and accepts U.S. dollars as well as cryptocurrency. Mashable reports there is no word yet on when the fund will begin trading. Coinbase said in a blog post that it is working on launching additional funds available to all investors and covering a broader range of digital assets.
Alongside the fund, Coinbase announced the Coinbase Index, which measures the performance of the assets listed on GDAX. The index calculates market capitalization as price multiplied by the total supply of coins created since the first block on each asset's blockchain. This differs from CoinMarketCap, which uses price multiplied by circulating supply. The Coinbase Index uses GDAX price data and will be reconstituted each time a new asset is listed on the exchange.
Mashable notes that the move places Coinbase alongside Grayscale, which already operates several cryptocurrency-tracking funds. The report cites Coinbase's growing user base, which was adding millions of new users per month toward the end of 2017, as a likely source of substantial exposure for the new index and fund, particularly if the company makes the fund available to retail investors as it has indicated it may.
The CIF is currently open only to U.S.-resident accredited investors and is accepting applications. The fund charges an annual management fee of 2% of assets and accepts U.S. dollars as well as cryptocurrency. Mashable reports there is no word yet on when the fund will begin trading. Coinbase said in a blog post that it is working on launching additional funds available to all investors and covering a broader range of digital assets.
Alongside the fund, Coinbase announced the Coinbase Index, which measures the performance of the assets listed on GDAX. The index calculates market capitalization as price multiplied by the total supply of coins created since the first block on each asset's blockchain. This differs from CoinMarketCap, which uses price multiplied by circulating supply. The Coinbase Index uses GDAX price data and will be reconstituted each time a new asset is listed on the exchange.
Mashable notes that the move places Coinbase alongside Grayscale, which already operates several cryptocurrency-tracking funds. The report cites Coinbase's growing user base, which was adding millions of new users per month toward the end of 2017, as a likely source of substantial exposure for the new index and fund, particularly if the company makes the fund available to retail investors as it has indicated it may.
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