Cryptocurrency platform Coinbase is introducing a cryptocurrency index fund, which customers can invest with Bitcoin.
Asiff Hirji, Coinbase President and COO introduced the new product on Tuesday through CNBC. Hirji said the Coinbase Index Fund, which will first be accessible to certified traders, shall hold market cap-weighted positions in the four cryptocurrencies presently listed on GDAX, along with any cryptoassets that are included to the platform in the future.
This, therefore, implies that, when it starts, the cryptocurrency index fund for Coinbase will hold positions in Ethereum, Bitcoin Cash, Bitcoin and Litecoin. Talking about those he feels will be enticed by the fund, Hirji said “I believe the buyers are not going to want to pick particular winners or losers,”
The company’s “first priority” is presently moving through the regulatory hoops required to create the fund and it desires to introduce in the future accessible to retail buyers.
“We are anticipating a massive demand from retail when that’s accessible, and we want to be in a position to recognize that demand,” Bramanathan told Fortune.
The Coinbase Index Fund, at first impression, looks similar to Grayscale Investments’, which holds significant positions in the five main cryptocurrencies by market cap. There are, nevertheless, a number of minor disparities.
The two funds currently have somewhat different compositions. Ripple’s XRP token is part of Grayscale’s fund, but it is not presently outlined on GDAX. Coinbase has also shared its expansion plans on its list of recognized cryptoassets in the future, which means that its fund will surely provide buyers with exposure to a wider array of assets than Grayscale’s fund, at least in the future.
While Grayscale investments are restricted to fiat, Coinbase permits buyers to purchase stocks using any cryptocurrency listed on GDAX. Lastly, Coinbase’s fund, which has a two percent management fee per year, is less costly when compared to Grayscale’s, which charges three percent per year.