The SPY Of Crypto? Coinbase Launches Cryptocurrency Index Fund

Coinbase dashed the hopes of thousands of ripple investors, who've been holding out hope that the exchange would add the coin, when it revealed that its "major announcement" Tuesday afternoon was, in fact, the introduction of the Coinbase Index Fund, a pioneering investing vehicle that just might do to cryptocurrencies what the ETFs like the SPY did for stocks. 

The company published the announcement on its blog:

We’re excited to announce Coinbase Index Fund.

Coinbase Index 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.

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.

Twitter users were unimpressed however because, as the company pointed out, Coinbase and associated exchange GDAX only lists four coins...

The news had some impact on the price of cryptocurrencies, which have been slumping Tuesday, with Ripple lower and the rest bouncing marginally higher...

 

 

 

 

 

The company didn't offer a date for the product launch, saying only that it would be available "very, very shortly." However, there's a catch: the fund will only be available to accredited investors based in the US. Over time, Coinbase hopes it can expand as regulators grow more comfortable with the product. The fund will be pegged to Coinbase's new Coinbase Index...

Coinbase

During an appearance on CNBC, Coinbase COO Asiff Hirji said crypto is "an asset class" and that "individual investors, they tend to trade in funds, and they tend to trade in index funds, passive investing. That's why we've created the index and we've created the index fund to enable that."

Importantly, the company also said it would add more coins to its platform as it vets them and there is more "regulatory certainty."

"We are committed to adding more assets to the exchange. If we add an asset to the exchange, it will show up in the fund. It will be market-cap weighted. We have a framework for how that works," Hirji said. "We’re trying to make this super simple," he added.

The fund is marketed toward an entry-point for folks who are new to digital tokens, or for those who want a passive investment, Coinbase product manager Reuben Bramanathan told Axios.

The fund also has a minimum investment of $10,000 and a flat 2% fee - though there are no performance fees.

As Axios points out, Bitwise Asset Management announced its own token-focused fund in December, raising funding from several big name VCs. Several smaller companies are also looking into building indexes and funds of their own. But Coinbase, which has more brokerage accounts than Charles Schwab thanks to last year's rally, has the clout to become a major player quickly.

Watch the full segment below:

Coinbase president announces index fund, initially for accredited investors from CNBC.

 

Comments

HRClinton lester1 Tue, 03/06/2018 - 23:04 Permalink

What is this, Amateur Hour or "Let's shill for Banksters"?

You only get taxed if...

1. You're a US PERSON and...

2. Have transacted on shitty exchanges, like Coinbase.

You will NOT have to pay a forking penny, if ...

A. You're a Non-US Person, or become one by leaving the US, along with the right paper steps to satisfy the IRS. 

B. You move to a TFJ (Tax Friendly Jurisdiction) somewhere in the world and convert CC into fiat, via an exchange. Then stay there or return some time later, after you've declared your fiat gains to the TFJ and paid miniscule taxes, leaving the rest Free & Clear in fiat land.

C. You use P2P exchanges to swap one CC for another. "No fiat Gains" are realized. You're merely trading Baseball cards.

D. You convert CC for any real asset, that is compact and portable: e.g. AU, Gems, Art, IP (Patent, Copyright).

E. You sell a real asset for cash (somewhere in the world) is also no one's business, when done in a private transaction. Especially if you avoid using Dollars, Euros or Pounds.

E.g. Say I bought a bunch of BTC from an Asian miner, for cash years ago, and then HODLed it till... last Nov/Dec. Then, let's say that I sold some of my HODLed BTC overseas, in a law office, for a stack of 0.9999 AU coins. This was a private exchange of Assets, that involved no fiats and no US tax jurisdiction.

You are now protected by the dual firewall of Jurisdiction negation and Total Info-Darkness. Let the IRS chase poor, dumb Schmucks, or the 47% who don't even pay taxes.

x x x x x x x x x

That whiney, BS and FUD-spreading little bitch "lester1" has no comeback for this of course -- cause there is none -- but that won't stop him/her from repeating his/her whiney bitch act tomorrow. Cause he/she just can't help himself.

In reply to by lester1

Exponere Mendaces Umh Wed, 03/07/2018 - 00:02 Permalink

Should be hilarious when they de-list BeeeeeeeCash, that shitfork coin has been going nowhere for a while now.

Their transactions are paltry, and have been for its whole run - http://fork.lol/tx/txs

Even better, the whole "Muh fees" narrative has fallen apart, with Bitcoin compressing even below the shitfork estimates - http://fork.lol/tx/fee

The best part, or the icing on the cake is when BeeeeeeeCash gets a slight spike in transactions, their fees go straight to the moon. This is conveniently left out of the narrative from Dancing Monkey Boy Roger Ver and others. Its largely why tmosley doesn't even talk about it anymore - because he's holding a bag of shit from its artificially pumped highs.

Passive investing in crypto? Why not, but CoinBase is going to get their lunch eaten for them, and soon. I'd spill why, but do your own fucking homework for once. I'm tired of fucking spoonfeeding motherfuckers on this site.

 

In reply to by Umh

Disgruntled Goat Umh Wed, 03/07/2018 - 03:47 Permalink

They must seriously be joking .... they couldnt even roll out the addition of BCH without the site going down and then being disrupted for days .... it took them 10 months to adopt Segwit, all the while bashing BTC because it is "slow" .... they failed to consolidate transactions properly, clogging the mempool to shit and increasing costs for everyone ... they send out stupid fucking juvenile communications like " please remember to pay your taxes" .... the site status is constantly "partially degraded" .... there are rumors that they somehow hacked themselves and lost private keys to cold wallets, potentially losing only God knows how much money .... the most pisspoorly run operation that has not blown up only by virtue of the fact that they are virtually the only on-ramp from fiat to crypto ....now theyre running an index fund ?????

In reply to by Umh

Yen Cross Tue, 03/06/2018 - 22:32 Permalink

  I wonder if Crypto traders are starting to see the differences between how sovereign and crypto currencies are traded?

  Sovereign currencies aren't traded as chits on some fake valuation sheet that a bunch of 80's boiler room felons thought up.

 In all fairness, sovereign currencies aren't worth the ass-wipes they're printed on either.

 Someone needs to tell Lou Dobbs to shut his fucking mouth. He's clueless when it comes to finance.  The guy is totally ruining his credibility, and needs to quit showboating.

  Stay on topic Lou, and don't profess to understand that you understand those fake numbers you're being fed intravenously.

Umh Tue, 03/06/2018 - 22:35 Permalink

It's amazing the ways people find to obfuscate things. On the face of things an ETF will smooth out the Bitcoin volatility. At the same time it will amplify the swings before all is said and done.

animalspirit Tue, 03/06/2018 - 22:40 Permalink

"'If we add an asset to the exchange, it will show up in the fund. It will be market-cap weighted. We have a framework for how that works,' Hirji said. 'We’re trying to make this super simple,' he added."

Super simple to end up with fewer BTC, ETH and LTC!

So they add to the index shitcoins like Ripple, IOTA, DASH whose market cap is about 10% of the existing 4 coins.  So at rebalancing, the fund sells 10% of the $BTC, 10% of the ETH, 10% of the LTC, etc., and buys the XRP, IOTA, DASH.

Wow, forced "diversification" into shitcoins.    Coinbase gets the liquidity from BTC, LTC, and ETH being sold, and if history repeats, they will have frontrun again and will benefit from the price spike on the shitcoins being added.

Play stupid games.  Win stupid prizes.

adr Tue, 03/06/2018 - 23:32 Permalink

And the further proof Coinbase is nothing but a fraud comes pouring in.

Did they ever enter a trade on the Blockchain for new "investors"?

Well now they don't need to. Just take people's money to invest in a fund that stands for nothing. Just like funds that track the S&P.

JibjeResearch Tue, 03/06/2018 - 23:33 Permalink

Coinbase has BTC, BCH, LTC, ETH, 4 coins

Coinbase Index Fund does not represent the crypto market.

Also, you can create many indexes from those 4 coins.

For the average people, just go with Coinbase Index, it's easy.

For most of us in here, it's better to do it ourselves.

All you have to do is divide your money into segments, and use each segment to buy whatever coin you think is good; thus, as a whole, you have YOUR crypto index fund.

On top of that, you benefit from forks.  If you put money into coinbase index, I don't think you can get the forked coin.  Double check on it.

Best Wishes :)

 

Sabibaby Tue, 03/06/2018 - 23:34 Permalink

You can get the Coinseed app and have all your debit/credit charges rounded up to the nearest dollar and put into fund of your own cryptos that you pick. So 20%BTC 20%ETH 20%XMR 20%ZEC 20%BCH NEO,XRP whatever. It's cool little app. Not much money but it adds up over time and yes when you cash out you have to pay taxes on it but it takes a LONG time to accumulate much money when your rounding up change on your debit/credit card. 

 

EDIT: You actually have to get the Coinseed app on Apple Store or Google play

Goodsport 1945 Wed, 03/07/2018 - 08:32 Permalink

Clearly the best way to rig prices.  Unlimited ETF / Index (or whatever they want to call it) supply equals unlimited profits for those who rig markets, thereby negating the law of supply and demand.  Hats off to the SEC, CFTC and all other useless regulatory agencies.  Free markets have left the building.  The power of big campaign donations knows no limit.  

GotGalt Wed, 03/07/2018 - 14:27 Permalink

Minimum $10,000 and 2% management to buy into this retarded ETF that only tracks 4 coins (with one of them being stupid ass bitcoin cash!)?  Wow, what a deal!