Coinbase Index Fund – Cryptocoin Investing Will Be as Simple as Investing in a Mutual Fund
On CNBC’s Fast Money this afternoon, Coinbase President & COO Asiff Hirji announced a new cryptocoin investing vehicle for the masses; the CoinBase Index Fund. With all of the simplicity of any other index fund such as the S&P 500 or the Dow Jones Industrial Average, the Coinbase Index Fund will take all of the guesswork out of cryptocoin investing and puts cryptocurrency investing on autopilot.
For those unaware of what an index fund is and how they work, this article will educate you in under ten minutes.
Now let’s pop the Champagne cork and celebrate the Coinbase Index Fund for the digital currency milestone that it is. Investing in cryptocoins is about to become as mainstream as investing in a mutual fund. (We’re not providing any more educational links so Google the term “mutual fund” for insights you may need.)
“It’s an easy way to get exposure to the crypto assets that we offer on our exchange,” says Coinbase President and COO Asiff Hirji.
That’s for sure. Easily half of the cryptocoin conversations on the Internet revolve around which coin to buy, how much of it, when will it go to the Moon, when can I buy my Lambo, etc. etc. The Coinbase Index Fund eliminates the guesswork by leveraging the weighted value of all of the coins listed on Coinbase.
The Coinbase Index Fund will be initially available only to accredited U.S. investors with every intention to expand the offering to ANY and EVERY investor. Citing caution and concerns over US regulations for this slow, cautious pace I salute the COO of Coinbase for exercising care and caution in a financial maret where chaos not only reigns, it is embraced.
Details of the Coinbase Index Fund are limited to explaining that investors will have exposure to all assets listed on the company’s current exchange, GDAX. The currencies will be weighted based on market capitalization.
In very much the same way the S&P 500 and the Dow Jones Industrial Average is a collection of stocks meant to give a sense of the American economy, this fund will try to reflect major trends in the cryptocurrency market.
At the moment, only American residents are legally allowed to invest at this stage, Hirji said, citing SEC oversight as a key reason. He said the company is working on launching more funds in the near future.
Hirjii highlighted Coinbases’s broader approach, which he said is more tailored to individual investors.
“I think the investors are not going to want to pick specific winners or losers,” Hirji said.
For the most part I agree with their philosophy. What’s most exciting about the Coinbase Index Fund announcement is the sheer trading volume it will bring which is very good news for cryptocoin miners who earn part of their profits from processing crypto transactions.
It needs to be said that Coinbase has earned and maintains its position as an industry leader. Coinbase is, as I see it, is the biggest cryptocoin advocate on earth. Crypto Capers founder Howard Sherman wrote about Coinbase Commerce, their commerce-based approach to making digital currency a part of buying or selling anything. If widely adopted, cryptocurrency will become much more than a simple store of value. Keep a close eye on Coinbase and bear witness to them changing the way the world makes and spends money.