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Coinbase Index Fund Adds ETC, Minimizes Fee To Charm Investors

The market has tumbled by over 5%, but this has not stopped the development of cryptocurrency products from moving forward. As Ethereum World News reported previously, the Coinbase Index Fund was launched in mid-June, opening its doors for accredited investors willing to allocate a minimum of $250,000 to up to $20 million to this fund.

The fund works as follows — the assets supported by the fund are weighted by market capitalization and then added to the product as such. So an investor who invests $1 million in the fund today would get $720,000 of Bitcoin, $190,000 of Ethereum, $20,000 of Litecoin, $60,000 of Bitcoin Cash and $10,000 of Ethereum Classic.

However, upon the release of the institutional-focused products, some investors expressed worries about the fees and lack of support for a wide range of crypto assets. But as a Medium post from Coinbase Asset Management alludes to, these worries are being addressed with two new improvements that will be implemented into the firm’s in-house index fund.

Coinbase’s Bid To Attract Investors

Firstly, the premier cryptocurrency platform revealed that it would be reducing its management fee for the Coinbase Index Fund to 1% annually. This is a hefty 50% reduction in fees as Reuben Bramanathan, the Product Lead at Coinbase Asset Management, alluded to in the following comment:

“We’re pleased to announce that we are reducing the annual management fee for Coinbase Index Fund from 2% to 1% for all new and existing investors.”

The Coinbase executive went on to explain the reasoning behind this reduction, noting that this move was made to “attract investors who are familiar with lower-fee index funds in other asset classes.” Hopefully, this decrease to a bare minimum fee should entice institutional investors to invest into this flowering asset class, which may be needed in a today’s bearish market. This just might be a primary catalyst that may bring vast amounts of institutional interest into this market, driving adoption, innovation, and prices to new all-time highs.

Secondly, the Coinbase Index has been rebalanced to include Ethereum Classic (ETC) to account for last week’s listing of ETC on Coinbase’s array of products. This move was not unexpected, as a post from the cryptocurrency giant mentioned ETC support for the index fund. Along with announcing investor “exposure” to ETC, Bramanathan noted that the fund will continue to add assets moving forward, including the five cryptocurrencies (Cardano, Basic Attention Token, Stellar Lumens, ZCash, 0x) mentioned in a previous announcement.

This is just another move that brings validation to Ethereum Classic, which has been mentioned in headlines all across the industry as of late. Over the past weeks, ETC/USD support has been added to Coinbase as aforementioned, Robinhood and Bittrex, which will only increase the amount of fiat inflow this asset sees in the future.

Many are hopeful for the success of this product, as many believe that an influx of institutional interest can right the sinking ship that is the current cryptocurrency market.

Photo by Samson Duborg-Rankin on Unsplash

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Coinbase's New Index Fund for Investors Is Now Live

Coinbase has formally launched a new index fund product aimed at large investors.

Announced Wednesday in a blog post by product lead Rueben Bramanathan, the Coinbase Index Fund is now “open for investments” with a minimum required investment of $250,000.

The fund will give investors access to all of the assets currently listed on Coinbase, which at present include bitcoin, bitcoin cash, ethereum, litecoin and now ethereum classic. The assets will be weighted by their market capitalization, according to the post.

Further, more assets can be added if Coinbase lists them at a future date.

Bramanathan wrote:

“We’ve seen overwhelming interest from investors since we announced the fund earlier this year. At this stage, we have opened the fund to those who wish to invest $250,000 to $20 [million].”

The fund was first announced in March. At the time Coinbase noted that it would offer exposure to any assets listed on GDAX, which is now being deprecated in favor of the firm’s new Coinbase Pro service.

However, the fund is not yet open to everyone – Bramanathan noted that, “At this stage, Coinbase Index Fund is only open to US-resident accredited investors.”

While he said that Coinbase is “working on launching more funds which are accessible to all investors and cover a broader range of digital assets,” no timeline has yet been provided.

Coinbase app image via Pe3k / Shutterstock

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