San Francisco-based Coinbase has just launched its own weighted fund. The American exchange is the largest cryptocurrency company in the world and was most recently valued at $1.6 billion. Coinbase also owns the institutional exchange, GDAX.
The company has formed a subsidiary company called Coinbase Asset Management to manage the Coinbase Index Fund.
In its Medium blog post, Coinbase says that it is “excited to announce Coinbase Index Fund. Coinbase Index Fund will give investors exposure to all digital assets listed on Coinbase’s exchange, GDAX, weighted by market capitalization.”
Reports confirm that the fund will require a minimum $10,000 investment with 2 percent annual management fee and no performance fee and will only be available to accredited investors in the United States. Investments can be made once per month in fiat, bitcoin or any of the listed cryptocurrencies, for those that have a preference.
Reuben Bramanathan, product lead for the Coinbase Index Fund says that every time a new asset is listed, the index will automatically be rebalanced to include it. He also told Fortune, “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 a likelihood that Coinbase will look to issue a fund that doesn’t solely comprise of funds listed on GDAX, but that will be at a future point.
As it stands, Coinbase’s 2 percent annual management fee appears to be cheaper than that of Grayscale Investments’ recently-opened Digital Large Cap Fund, at 3 percent per annum.
According to the latest data (at the time of posting) from CoinMarketCap, GDAX ranks 7th on the list of exchanges by highest trading volume. Currently, GDAX trades around $505MM worth of bitcoin and cryptocurrencies, with a total of 12 digital currencies listed on the exchange, including Bitcoin, Litecoin and Ethereum.
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