Coinbase Inc. which is the popular for cryptocurrency trading is set to launch a subjective index fund for cryptocurrencies as it steps into the asset-management venture for the first time. The digital asset exchange firm announced on Tuesday its plan to establish a first ever index fund that marks its entry into assent management.
Reuben Bramanathan who is the product lead told Reuters that the U.S based firm which is also the largest cryptocurrency company globally and recently valued at about $1.6 billion has come up with a subsidiary known as Coinbase Asset Management to administer the newly introduced Coinbase Index Fund.
Bramanathan further said that the fund would give investors access to all the assets listed on Coinbase’s institutional exchange, GDAX, weighted by market capitalization. Every time a new asset is listed, it will automatically be added to the fund.
Asiff Hirji, the President and Chief Operating Officer of Coinbase announced this development on Tuesday afternoon saying that it’s very simple to use, and an easy way to gain access to the crypto-assets offered by Coinbase on exchange.
The fund is set for a $10,000 minimum and a charge of 2 percent per year as management fee and no performance fee. This is rare for most old-fashioned investment funds, but fortunately it is becoming the rule for crypto-specific passive investment vehicles.
For the time being, the fund will be available to the U.S. resident accredited investors only. Bramanathan affirmed that Coinbase is working towards launching even more funds which are accessible to investors and can cover a wider range of digital assets.
This new fund will track the Coinbase Index to be launched, and this is a scale of performance for all the assets listed on Coinbase. The digital currencies listed on Coinbase include litecoin, bitcoin, Ethereum, and bitcoin cash.
Coinbase’s Bramanathan stated that majority of the funds are actively managed funds, and a there is a wider margin or demand for the index funds which enable investors to keep track of performance for the entire asset class, instead of simply trying to pick winners.
Earlier on, it was reported that Coinbase told shareholders that it posted revenue of about $1 billion in 2017, boosted by the frenzy of applications as well as trading as the price of cryptocurrencies and bitcoin surged over the last two months of the year.