Coinbase has announced a new ‘index fund’ that will allow customers to invest in overall profits from cryptocurrency markets.
The fund comes at at time when other exchanges offer hedge funds for ‘high end’ investors to profit off overall market increases. Coinbase, however, is offering an index fund that will be available for a much wider selection of investors. The fund will likely be registered as an exchange-traded fund (ETF) in the near future.
The Coinbase index fund requires a minimum investment of $10,000 and is accepting applications right now. The fund weights different cryptocurrencies to their market caps and acts like a Dow Jones of the crypto ecosystem.
Given the structure of the fund, an investor would have seen a return of around 995% over the past 12 months. These staggering prices are larger than the organic price rise of Bitcoin and may provide just that much more profit and stability to solidify a diverse portfolio.
The new index is like a Dow Jones of cryptocurrencies and allows investors to see the overall rating of the crypto ecosystem without getting stuck on individual markets. An investor could buy into the fund and by doing so will be investing in blockchain technology as a whole. This option may allow investors from other markets to gain a gateway into the world of digital currency.
Many investors have been hesitant to invest in cryptocurrency due to many high end people like Warren Buffett criticising the currency. A new fund may make the currency more inviting for new investors and may also attract more trading volume at a time when consumer confidence in Bitcoin has dwindled quite a bit.
Coinbase is a notable company to be issuing the index fund because it is the largest cryptocurrency in the world valued at $1.6 billion. Coinbase is like the Goldman Sachs of the crypto world and is a fitting platform for issuing the ‘Dow Jones’ of crypto investments.
The changes come at a time when Coinbase has been embroiled in court cases and controversy. The new index fund may provide them with extra profits and cover over the controversy of previous weeks.