Just hours after revealing plans to include Ethereum Classic to its exchange, Coinbase has now opened the doors for investment in its newly-created cryptocurrency index fund to US-resident accredited investors.
The company said in a blog post that it has seen ‘overwhelming’ interest from investors, and now it is reaching out to those who want to invest between $250,000 and $20 million. For now, the company said, participation is limited to accredited investors in U.S.
Targeting Institutional Investors
The announcement said that the opportunity is available for those willing to invest between $250,000 and $20 million. That’s a pretty big caveat since crypto, by default, is open to anyone in the world irrespective of the amount of capital, although a lot startups or ICOs tread carefully in markets like the US. However, the latest move by Coinbase is very specifically targeting institutional capital, given that recently the firm has added various services for Wall Street-like professional investors.
To break up the message, an accredited investor needs to have a net worth of over one million dollars, along with having an income of over $200,000 annually. This extravagant prerequisite will minimize the number of investors allowed to put money into this index fund, reducing the uptake greatly.
Coinbase CEO Brian Armstrong sought to explain the firm’s position on Twitter, highlighting how the fund is much more financially feasible, too; undercutting the exorbitant 2–20 percent fees “charged by most crypto hedge funds.”
The firm also highlighted some of the immediate benefits that investors will enjoy by investing in the Index Fund.
“Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization.”
– Read part of the announcement.
Coinbase did say that it is working to launch other funds that are “accessible to all investors and cover a broader range of digital assets” so, if you’re not an accredited U.S. investor, there might yet be opportunities for you, depending on what comes next.
Hopefully, these proposed funds will begin their respective launches in the near future, with large amounts of retail and institutional adoption following closely behind.
The past 24 hours have come with two large announcements from this exchange giant, with Coinbase also announcing that they will be supporting Ethereum Classic in the near future.
Coinbase first announced the new investment product back in March 2018. Since that time, a number of companies have released their own index funds, including popular Asian crypto exchanges Huobi and OKEx.
It is still too early to gauge how investors have received this investment opportunity but community sentiment, whether positive or negative, will become clearer in the next couple of days.
Do you think Coinbase’s Crypto Index Fund will be successful? Let us know in the comments section.