Coinbase to Launch Crypto Index Fund
March 8, 2018
One of the most popular cryptocurrency exchanges in the world Coinbase announced the launch of its own index fund, which will allow investors to track and earn on popular cryptocurrencies, listed in this fund.
The fund is called Coinbase Index Fund (CBI) and will become the first experience of the US stock exchange in asset management.
A product manager at Coinbase Reuben Bramanathan wrote in a blog entry:
"Index funds have changed the way that many people think about investing. By providing diversified exposure to a broad range of assets, index funds enable investors to track the performance of an entire asset class, rather than having to select individual assets. We’re excited to give our customers the ability to invest in the potential of blockchain-based digital assets as a whole."
Coinbase Index Fund will provide investors with an opportunity to indirectly invest in cryptocurrencies, by buying the shares of the fund. Previously investors were forced to directly invest fiat currencies in tokens.
The structure of CBI is 62% of BTC, 27% of ETH, 7% of BCH, and 4% of LTC. The exchange says that more tokens will be added to the fund, if they would be listed on the GDAX exchange.
Currently, the fund is available only for accredited US investors, although Reuben Bramanathan assured that the exchange will create and launch more index funds in the future, allowing more investors to invest in cryptocurrencies indirectly.
In fact, this index fund is not the first of its kind. In December 2017, an US startup Bitwise Asset Management launched crypto index fund called HOLD 10, in which 10 popular cryptocurrencies are listed, including such well-knows altcoins as Monero and Ripple. However, in the case of Coinbase, this is a completely different level, since the estimated valuation of the exchange exceeds $1.6 billion. Therefore, the creation of an index fund by such large exchange could seriously affect the whole cryptocurrency market.