Index Fund Launched by Coinbase
Coinbase Asset Management team had announced in March about the creation of Coinbase Index fund.
The users reacted positively to the announcement and started believing that the fund will generate a huge amount of funds and will also generate institutional and retail investments.
On June 13th, Company announced that the Coinbase Index Fund is open for all investors. The fund is open for investments ranging between $2,50,000 to $20M. The Coinbase index fund will be composed of all crypto assets available on exchange services of Coinbase.
The fund will, however, be open to the U.S. accredited investors which left other users disappointed. It is also not clear as to why the range is set between $2,50,000 to $20M and will not be accepting investments ranged over $20M.
Though the possibility is that the fund might not be able to undertake a huge amount of investment currently. This restriction might lead to a limited number of investors resulting in reduced adoption.
The cryptocurrencies on the Coinbase Index Fund will be weighted according to their market capitalization. This is done to ensure that investors receive a performance that matches the foremost crypto assets.
It will also comprise of the new addition made to Coinbase, Ethereum Classic, apart from other cryptocurrencies. The fund comprises Bitcoin, Bitcoin Cash, Ethereum and Litecoin too with respective weights of 61.5%, 8.2%, 27.2% and 3.1%. The company will update the Coinbase Index Fund with more assets as soon as Coinbase lists them in future.
As Coinbase is insured from the risk of asset loss, the fund will also provide an additional layer of security reducing the risk for all the potential investors. Coinbase is also a reliable place for storing cryptocurrencies as in the past six years, it has not been exposed to any kind of hack.
To keep up with the volatile market conditions, the team of Coinbase Fund Management will have to rebalance the portfolio quite frequently costing a 2% annual fee.
Coinbase is focussed on expanding its services and products to attract more institutional investors. The news was posted on Twitter by CEO and Co-founder of Coinbase, Brian Armstrong.
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