Coinbase, which is now the largest American cryptocurrency exchange, announced Tuesday that it was launching its index fund. It will allow users to invest in the cryptocurrencies on Coinbase (Bitcoin, Ethereum, Litecoin, Dash and Bitcoin Cash) all at once and without buying them directly on the exchange.
The exchange, which is the most valuable company in the cryptocurrency sector, is valued at $1.6 Billion. Coinbase has decided to launch the fund in order to progress towards its goal of going from an asset-management firm to a real Bank. They are already surpassing some large banks for the number of clients and for the volume of transactions.
For now, the fund will only be available for U.S. accredited investors who make more than $200,000 in revenue or who have a net worth of more than $1 Million. The minimum amount to invest is $10,000.
They are planning on launching a similar fund for the average investor, but it is still under approval.
According to Reuben Bramanathan, Coinbase product lead,
“The first priority [is] working towards funds that will be available to all retail investors. We’re expecting huge demand from retail when that’s available, and we want to be in a position to accept that demand.”
There is still no timeline regarding the retail index fund.
On Coinbase, it is possible to track the performance the fund would have had in 2017. Basically, the fund would have increased 11-fold during the year. Someone who would have invested $10,000 would have $110,000 one year later.
Coinbase is not the first company to launch a cryptocurrecy fund. Grayscale Investments also launched its own index fund for Bitcoin a few years back and has recently decided to launch a more diversified fund of digital assets.