Coinbase Index Fund: Crypto Asset Management Investment?
What Is The Coinbase Launches Index Fund?
Massive United States crypto-exchange platform Coinbase has made an announcement that they would be launching their first index fund. GDAX, or the Global Digital Asset Exchange, based out of San Francisco and owned by the retail exchange company would start giving trusted investors access to purchasing the lot, which includes all assets set into one single financial based product.
“We’re seeing strong demand from our customers and the market generally for a passive investment management product… but we’re finally seeing demand so that’s why we’re launching now.” The statement was given by Coinbase’s Reuben Bramanthan to Reuters.
They then went on to state:
“We’re excited to announce Coinbase Index Fund. The Fund will give investors exposure to all digital assets listed on Coinbase’s exchange, GDAX, weighted by market capitalization. If a new asset is listed on the exchange, it will be automatically added to the fund.”
GDAX is the new exchange for Coinbase, based on professionalism and used to trade more commonly seen stocks exchanged, like market, stop, margin and limit orders. Opposite of that would be Coinbase’s exchange, which is used by more than thirteen million customers in retail who usually see the exchange as their first entrance into cryptocurrency buying and selling. As of now, there are four different virtual assets listed and paired, Litecoin, Bitcoin Cash, Ethereum, and Bitcoin Core. And as of now they are strong at the top, recognized as the largest cryptocurrency company on the globe. They are currently holding a value of more than half a billion United States Dollars.
Bramanathan was also heard to say:
“We are seeing new investors coming to the market because they see an asset that is not correlated and outperforms, but they don’t now which ones to buy.”
If you don’t know what index funds are, they first became popular on Wall Street in the 1970s buy way of John C. Bogle, head of the Vanguard Fund. There have been numerous speculations on the efficacy of those managing the funds in relation to their ability to beat inflation by way of matching broader markets. Without the fees and other off the wall incentives, to jump in and out of different places, index funds are typically viewed as conservative investments.
Usually, investors would just buy a weighted percentage for a whole class, on multiple classes or something similar and then just sit back and hope the investment pans out over a long period of time. Lower performing investments are sometimes mitigated by higher ones. And even though there would never be any massive gains typically, there would also never be massive losses in most cases either.
The company went on to continue by saying:
“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 (CBI) is placing the following at the current weights: Litecoin 4%, Bitcoin Cash 7%, Ethereum 27%, and Bitcoin Core at 62%. With these numbers, one can almost get a sense of the potential worth through way of stimulating an index on Tradingview. By simply typing each in the ticker bar, you can see a climb in value over a very short period of time.
The company then goes on to ad the following as words of caution:
“At this stage, investing in Coinbase Index Fund will only be available to US-resident, accredited investors. We’re working on launching more funds which are available to all investors and cover a broader range of digital assets.”
The investors are then encouraged to get started with the platform, but it looks like CBI won’t be showing up for at least a few months while awaiting the proper legal clarification from the SEC, or Securities and Exchange Commission.
In direct accordance to the paper focused on methodology:
“New digital assets created through blockchain forks or airdrops will not be added to the index unless and until they are listed on GDAX. Each new asset must, in its own right, satisfy the criteria in the GDAX Digital Asset Framework and be listed on GDAX in order to become a constituent asset of CBI.”
The company Coinbase, is now a leading contributor to cutting edge, though provoking interview answers as of recent. They are seeking the final title of being the “Google of Cryptocurrency.” And they are looking to create a strong emphasis on taking over the previously uncharted marketplaces. But for now, other company to look at in run with Coinbase is Bitwise, who is currently holding ten different cryptocurrencies in their index as well as the Crypto20.