Coinbase's Index Fund, Not Yet Democratized

Date : 06/14/2018 @ 12:48PM
Source :InvestorsHub NewsWire
Stock : Bitcoin (BTCEUR)
Quote : 5773.12  214.12 (3.85%) @ 7:11PM

Coinbase's Index Fund, Not Yet Democratized

 

Bitcoin Global News (BGN)

June 14, 2018 -- ADVFN Crypto NewsWire -- When you hear that one of the biggest Crypto investment firms has opened an index fund to investors, you might think that includes the inspired concept of an investor from Satoshi Nakamoto’s original white paper.

In other words, you might think that means everyone and such a thought wouldn’t entirely be off-base.

Coinbase’s Index Fund, however, doesn’t quite match up to these expectations.

As of Tuesday, this week, they have opened up their fund to accredited, US-based investors who can put in anywhere between $250,000 and $20 million. It should be delineated here, however, that this doesn’t mean that other investors, bigger or smaller, won’t be able to join in at a later date.

The language that was used in the company blog post that made the announcement was “at this stage, we have opened the fund to those who wish to invest $250,000 to $20 million.” With this in mind, their long term plan for the fund isn’t clear but it could be said that they are working through a Tesla-like strategy, at this point.

What this would mean is that they would use the large, early investments to get their fund up to whatever their ideal level is, before opening it up to more affordable levels of investments. The large investments would, in this way, hopefully stabilize the fund and help it to learn to mitigate against market risk.

Even if “anyone” can invest at a later date, it is not clear whether Coinbase plans to go global with this fund or not. Whatever does happen in the end, it is a step towards introducing more powerful investors to the Blockchain as well as a step towards further raising the industry market cap.

One of the criticisms or rather, concerns, which comes to light with regards to this fund is the fact that as of now, it isn’t exactly diversified as much as it could be. It currently includes: Bitcoin, Ethereum, Litecoin, and Ethereum Classic. It is logical to ask why Coinbase has not added more assets before launching such a fund, but at the same time, it should be noted that in the same company blog post, they made it clear that they plan to add “more.” The next step should be ERC20 tokens as the company recently added support for them on its platform in preparation for choosing which it will eventually list.

 

 

By: BGN Editorial Staff



 

 

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