Coinbase Launches A Cryptocurrency Index Fund Tracking GDAX Trading Assets
A simple, transparent, easy in easy out, low fee fund, just like an ETF!
Coinbase Launches the Dow Jones of Cryptocurrencies
In the light of the fact that the demand for cryptocurrencies is currently largely governed by active traders and some institution investors, Coinbase has taken steps to address the individual investor. It is now offering an easy way to retail investors to gain exposure to assets that are offered on its exchange – GDAX. Coinbase President and COO, Asiff Hirji, was interviewed by CNBC’s “Fast Money” on Tuesday, March 6. “It’s a market-cap-weighted index fund tracking the Coinbase index (also announced today),” Hirji told CNBC.
Available Only to Accredited Investors Initially
The index and the fund will be available very shortly. Upon launch, the fund will be available only to accredited investors and will come with a no lock-in period. The reason, as cited by Hirji, is regulatory uncertainty. Accredited investors are the only class of people who are allowed to invest in these funds as of now. Over time, the fund will potentially expand to all investors, Hirji explained, “but working with the regulators is what is going to make that happen.”
Coinbase Asset Management Has Been Set Up
A separate entity under the name of Coinbase Asset Management has been set up to act as the custodian of the fund. The company has major cryptocurrencies trading on its GDAX exchange such as Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. However, it does not currently offer Ripple’s native asset, XRP. From what Hirji told CNBC, the company is keen to add more assets to its exchange, however, it will only do so when they see that regulators judge them as legitimate. As of now, there’s a lot of uncertainty around many tokens and ICOs under the SEC’s strict vigilance. Read SEC Subpoenas Michael Arrington And 80 Cryptocurrency Firms, The SEC Sets Its Sights On ICOs, BitFunder Charged With Fraud By US SEC for more perspective on the SEC’s crackdown on token and ICO offerings.
“We are committed to adding more assets to the exchange. If we add more assets, it will show up in the fund” said Hirji.
“Just Like an ETF!”
Cryptocurrencies as an asset class have matured. Access to cryptos has expanded from active traders to institutional investors (through direct, fund, and futures), and now to retail investors (passive investing through index funds). “It is a simple, transparent, easy in easy out, low fee fund, just like an ETF.”