Coinbase Unveils New Weighted Cryptocurrency Index Fund
Coinbase whose recent valuation placed it at $1.6 billion created a subsidiary Coinbase Asset Management which will be tasked with managing the Coinbase Index Fund. Reuben Bramanathan, the product lead for the weighted index fund revealed that the initiative will work towards making sure that investors are exposed to all the assets that are listed on the cryptocurrency exchange. This means that each new asset listed on the crypto market will be added to the fund automatically.
In his statement, Bramanathan pointed out that: “We’re seeing strong demand from our customers and the market generally for a passive investment management product.”
Bramanathan also revealed that the Index fund has been part of the company’s plan for a long time but now is the ideal time to launch it because there is supportive demand. The fund will initially be exclusively available in the U.S although Coinbase revealed that it is planning to launch more funds to expand access to more investors.
Asiff Hirji, the President and COO of Coinbase told CNBC in an interview that the new weighted index fund will be an easy way to provide cryptocurrency assets exposure to traders. The new index fund has been likened to the Dow Jones Industrial Average in the sense that it will evaluate major trends in the cryptocurrency market and present this information to investors. The Dow Jones evaluate a stock portfolio with about 30 stocks and it uses this performance to evaluate the performance of the American economy.
As for the legitimacy of the assets, Hirji also pointed out that Coinbase has been exercising caution when bringing new cryptocurrencies on board. This is important considering the fact that there scammers out there trying to make some quick cash. Coinbase is not the only crypto firm that has launched an investment fund. A company called Grayscale bitcoin recently launched four new funds which will be available to traders who have invested a minimum of $10,000 and it also offers an investment period. This means it is better suited for institutional investors. Hirji revealed that its new fund unlike those of Grayscale is ideal even for individual traders.