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Coinbase President Announces "Coinbase Index Fund" on Fast Money


Coinbase, one of the most popular and user-heavy cryptocurrency exchanges has stated its plan to start a fund consisting of the four coins currently listed on their platform: Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Weighted by marketcap, the fund plans to rebalance as new assets are listed.

The San Francisco based startup launched the Coinbase Index Fund on tuesday and, although it has not begun trading, they are currently taking applications.

Only U.S. accredited investors will have the opportunity to participate in the fund at this time and $10,000 is the minimum required investment. An accredited investor is someone who has an annual income of at least $200,000 or a net worth of at least $1 million. The fund will be charging a flat 2% annual fee and will be accepting investments in both U.S. dollars and cryptocurrency.

Reuben Bramanathan from Coinbase: “The first version of this fund for regulatory reasons will be limited to US accredited investors, but as we build more funds we’ll make them available to US retail investors”.  Coinbase is anticipating the introduction of a comparable fund available to the average investor most likely in the form of an exchange-traded fund or ETF if they can get approval from the Securities and Exchange Commision.

The Securities and Exchange Commission has so far rejected any proposals for Funds consisting of cryptocurrencies. A year ago they rejected the application for a Bitcoin ETF, meaning Coinbase will most likely find itself dealing with the same hurdles to launch a retail ETF from the SEC.