Coinbase switching its investor focus

Coinbase just recently started microfunds for their customerbase.

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Their switch in Coinbase tenor:

“The assets are weighted by market capitalization. The Index level takes into account the ongoing increases in supply of each asset, not just changes in price. The Index is reconstituted each time that a new asset is listed on GDAX,” for e.g. the recent addition of ETC. “Unlike actively managed investment funds [the fund manager of its Index Fund] does not actively trade assets, or target a specific allocation for any asset.”

Makes people wonder how coinbase can charge 2% for fund management if no one does a thing.

Coinbase, is shifting its focus from a relatively new feature called “Coinbase Bundle,” allowing users to buy with a few clicks a bundle of the coins listed on their exchange. The retail-aimed product allows users to invest as little as $25 in the basket of coins. It launched at the end of September. It isn’t the first crypto basket product available, to be sure. Circle Invest, which allows an investor to buy 11 different tokens in a single investment — with an even lower minimum of $10. Circle Invest has solid reviews on Apple’s App Store, although it is not really popular. Unlike an index fund, retail products like Coinbase Bundle don’t offer rebalancing and have fixed methodologies.

Switch to Investors

Coinbase recently opened its Index Fund to investors. Accredited US investors now have open access to all cryptocurrencies listed on GDAX, the crypto-exchange by Coinbase. The company aims to launch more funds which will be available to all investors and which will also include a wider range of digital currencies.

Acording to Reuben Bramanathan, Product Lead of Coinbase Asset Management:

“We’ve seen overwhelming interest from investors since we announced the fund earlier this year. Coinbase index Fund gives investors exposure to all assets listed on our exchange, weighted by market capitalization…At this stage, Coinbase Index Fund is only open to US-resident accredited investors. We’re working on launching more funds which are accessible to all investors and cover a broader range of digital assets.”

Minimum - Maximum

The minimum investment amount for the Coinbase Index Fund is $250,000 and the maximum is $20 million. The Fund has an annual management fee of 2%.

Coinbase is known for its broad crypto business, which covers trading, institutional and retail brokerage, and venture capital. It looks as if management of Coinbase did no look deep enough into their userbase. It did not make sense that a firm is focusing on retail, amassing more than 20 million users while active users on the platform are down by 80% as Bloomberg reported Thursday. As CoinDesk previously reported, the firm is looking to hire 100 people to build out its New York office aimed at luring Wall Street firms to the crypto markets. It is their last straw to hold onto?

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