Coinbase Opens Up Whale Index Fund For U.S. Accredited Customers
Coinbase has opened up an index fund for its customers who are accredited U.S. investors, giving them exposure to all cryptocurrencies listed on its exchange GDAX. The company is now working on “launching more funds which are accessible to all investors and cover a broader range of digital assets.”
Coinbase, one of the largest cryptocurrency brokerage companies, announced yesterday, that Coinbase Index Fund is now open for investment to whales in the U.S. who have at least $250,000 to invest into BTC, ETH, BCH, and LTC, as well as soon recently added ETC.
“We’ve seen overwhelming interest from investors since we announced the fund earlier this year,” Reuben Bramanathan, Product Lead of Coinbase Asset Management, wrote. He elaborated:
Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization…At this stage, Coinbase Index Fund is only open to US-resident accredited investors. We’re working on launching more funds which are accessible to all investors and cover a broader range of digital assets.
The company’s website states that “Our vision is to make index investing in digital assets available to everyone.” Further, the company emphasized that they are “beginning the work required to offer index funds to all U.S. investors,” not just accredited ones, adding that “In the future, we hope to be able to offer index investing to customers in the US and internationally.”
Coinbase Index Fund “is a private fund that seeks to track Coinbase Index (Fixed Supply),” which is a measure of the overall performance of the cryptocurrencies listed on Coinbase’s exchange, GDAX, the company describes.
The brokerage giant recently announced that it is “on track” to register with the U.S. Securities and Exchange Commission (SEC) as a broker-dealer, a move which would allow the company to list crypto assets that the agency deems to be securities.
As part of securing the licenses, Coinbase acquired three companies holding various federal licenses: Keystone Capital Corp., Venovate Marketplace, Inc., and Digital Wealth LLC. Keystone and Venovate are each registered with the SEC and FINRA as broker-dealers, while Digital Wealth has an RIA license from the SEC. Further, Venovate also has a license to operate as an ATS.
The minimum investment amount for the fund will be $250,000 and the maximum is $20 million. The fund’s annual management fee is 2%.
“The assets are weighted by market capitalization. The index level takes into account the ongoing increases in the supply of each asset, not just changes in price,” the company noted, adding that the index is “reconstituted each time that a new asset is listed on GDAX,” such as the recent addition of ETC.
The current composition for the fund for investors is – 61.47% BTC, 27.17% ETH, 8.22% BCH, and 3.14% LTC. (the fund will soon be restructured to include ETC.)
Moreover, Coinbase explained that “Unlike actively managed investment funds,” the fund manager of its index fund “does not actively trade assets, or target a specific allocation for any asset.”
Earlier this year, Coinbase was ordered under court order to cooperate with U.S. tax authorities and turn over thousands of its customers’ names and personal information to the U.S. Internal Revenue Service (IRS) in an effort for the agency to collect taxes from its users.
Coinbase of late has been very active creating new companies and expanding their already existing business.
In February Coinbase launched a new Commerce service self-titled Coinbase Commerce to help online merchants handle payments in four leading cryptocurrencies – BTC, ETH, Bitcoin Cash, and LTC.
Then in April, Coinbase acquired Earn.com, a website that lets users get paid in cryptocurrency for answering emails and completing tasks as part of an acquisition deal.
Recently, Coinbase opened up a new branch in Japan, with a presence in 32 countries already, U.S. cryptocurrency exchange Coinbase is expanding into one of the world’s biggest cryptocurrency markets.
In another announcement, the San Francisco-based company confirmed the launch of another office in Japan and its plan to work “hand-in-hand” with the country’s Financial Services Agency (FSA), financial regulator, to ensure compliance with local laws.
“As in other markets, we plan to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA to ensure compliance with local laws at every stage,” Coinbase wrote.
Coinbase reportedly made $1 billion in revenue last year, according to Recode, and the cryptocurrency exchange claims to have served over 10 million users on its platform.
Bitcoin is currently trading at [FIAT: $6,355.24] down -6.30% according to Coin Market Cap at the time of this report.