MENU

Coinbase announces plans to launch a cryptocurrency index fund

Investors will soon been given a new way to invest in cryptocurrencies after Coinbase announced plans to release a weighted index fund for cryptocurrencies.

Asiff Hirji from Coinbase, the leading U.S. marketplace for buying and selling major digital currencies, announced the plan on CBNC overnight. Coinbase’s president and chief operating officer explained that: “It’s a very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange.”

The Coinbase Index Fund will initially provide accredited U.S. investors exposure to all assets listed on the company’s current exchange, GDAX. After which, there is speculation that it could open up more widely.

The aim of the Coinbase Index Fund will be to reflect major trends in the cryptocurrency market in the same way that the Dow Jones Industrial Average is a reflection on the state of the U.S. economy.

According to the company’s release, the funds will be weighted heavily towards bitcoin (BTC). It will make up 62% of the funds, with ethereum (ETH) making up 27%, Bitcoin Cash (BCH) accounting for 7%, and Litecoin (LTC) making up the remaining 4%.

Although it is not expected to go live with investors for a couple of months, the Coinbase Index is already up and running for tracking purposes. As you can see below, it is at 4.981.31 points at present.

Source: Coinbase

Foolish takeaway

Mr Hirji seems to think that this broader approach will be a winner for the company because “investors are not going to want to pick specific winners or losers.”

I agree with him on this and think the launch is a good idea. However, it doesn’t mean that using the index will make things any less risky.

So if the opportunity to use the index in the future does arise, I would suggest you only trade with what you can afford to lose.

Whilst I think the Coinbase Index launch is positive news, I'm still betting that these explosive growth shares smash crypto returns in 2018.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.