Coinbase Announces Crypto Index Fund

GDAX trading is one of the few sources of Bitcoin price discovery against fiat, while more exchanges rely on trading against the fixed-price Tether tokens.

The US largest cryptocurrency exchange, Coinbase, announced on Tuesday the launch of a Coinbase Index Fund, a weighted tracker of all the crypto assets listed on the GDAX, the trading platform of Coinbase.

The announcement came from Coinbase COO Asiff Hirji, who was invited to CNBC’s Fast Money to make “the big announcement that would rock the crypto world forever.” Hirji said that both the fund and the index would be available very shortly. 

“It's a very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange,” he said.

According to him, the fund will resemble an exchange-traded fund (ETF) given its simplicity. Coinbase’s crypto index fund will target individual investors, though institutional ones can jump in as well. However, initially, it will be available for accredited US investors only. Accredited investors in the US are high net worth individuals, with annual wages above $200,000 or net worth above $1 million excluding housing.

Asiff Hirji, COO of Coinbase

The fund will track the Coinbase Index, the benchmark data that weighs the market capitalization figures of GDAX’s cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. When Coinbase will add new cryptocurrencies, and Hirji did confirm it would do this with time, the latter will get automatically listed in the fund.

Coinbase hopes to give investors the chance to trade on the major trends of the crypto space, supporting the maturation of this asset class. Hirji revealed that the company would release more similar funds in the next months.

At the beginning of his interview with CNBC’s Fast Money show, Hirji promptly denied rumors that his upcoming announcement would involve the listing of Ripple. Some investors hoped that the CNBC’s show invited Coinbase’s Hirji and Ripple’s CEO Brad Garlinghouse to announce that Coinbase would add XRP, but this was not the case. The two executives were not even present together at the show.

Coinbase’s chief operating officer also explained the high volume of customer complaints, saying that the market has grown too fast, so it was impossible to avoid “some bumps in the road.” The company wants to address all the issues and is about to hire 500 employees, with 90 of them already starting their work these days. Recently, Coinbase hired Emilie Choi as VP of corporate and business development. Previously, she worked for LinkedIn holding the same position.

According to Financial Times, the Coinbase Index Fund will charge a flat 2% annual fee.