Coinbase is hoping to capitalise on the increased amount of interest in the likes of Bitcoin, Ethereum and Litecoin by launching an Index Fund for digital currencies.
The Coinbase Index Fund, which has been informally dubbed the ‘Down Jones of cryptocurrencies’, will make it easier for investors to assess how digital currencies as a whole are performing, rather than individual assets.
It will give investors exposure to all of the digital currencies listed on the Coinbase exchange, weighted by market capitalisation. At present, those are Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
If and when a new digital currency is listed on the exchange, it will automatically be added to the fund.
“Index funds have changed the way that many people think about investing,” wrote Coinbase’s Reuben Bramanathan in a blog post.
“By providing diversified exposure to a broad range of assets, index funds enable investors to track the performance of an entire asset class, rather than having to select individual assets. We’re excited to give our customers the ability to invest in the potential of blockchain-based digital assets as a whole.”
The Coinbase Index Fund is currently only open to US-based, accredited investors, and the minimum investment size is $10,000 (~£7,200).
The company has also launched the Coinbase Index, which tracks the overall performance of Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
It’s weighted by market capitalisation, and Coinbase says the index level is calculated based on the latest price data from the Coinbase exchange, and the latest total supply of each asset on its blockchain.
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