Coinbase Opens Index Fund for Investments up to $20 Million

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Major crypto exchange Coinbase is now officially in the asset management business. Its digital asset index fund opened on Wednesday for investments, providing exposure to a predetermined basket of assets listed on its exchange.

According to a statement from the San Francisco based exchange, the Coinbase Index Fund will accept investments starting at USD 250,000 up to USD 20 million from accredited US investors.

“We’ve seen overwhelming interest from investors since we announced the fund earlier this year,” said Reuben Bramanathan, Product Lead of Coinbase Asset Management, in a statement.

“Coinbase Index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization. As we announced yesterday, the fund will be rebalanced to include Ethereum Classic, and more assets when they are listed by Coinbase in the future,” he said.

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At this stage, Coinbase said its Index Fund is only open to US-resident accredited investors, but it is working on launching more funds which are accessible to all investors and cover a broader range of digital assets.

Clearly targeted at the institutional side of the investment market, Coinbase’s crypto fund is weighted by market capitalization and the company said it will charge a simple 2 percent annual management fee, similar to most hedge funds, but there will be no performance fee.

The current composition of the fund, according to the company’s website, is 61.47 percent Bitcoin, 27.17 percent Ethereum, 8.22 percent Bitcoin Cash and 3.14 percent Litecoin.

It’s notable that Coinbase’s Index Fund has been launched with a fanfare at a time when cryptocurrencies across the board are undergoing a sharp correction downward. However, that might not necessarily put off institutional investors who are looking for options in this area and, at current levels, this fund could be an interesting entry point for exposure to a balanced basket of assets at knockdown prices.

About David Bentley

David Bentley is an experienced financial writer and communicator specializing in offshore financial services, hedge funds and technology.

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