Coinbase, one of the biggest companies in the cryptocurrency exchange world is now adding a new service for its customers in the form of Index funds.
The California based exchange which is valued at $1.6 billion is one of the most accepted crypto exchange in the world. It recently surpassed Charles Schwab, a well-known bank, and brokage firm, with the highest number of customer accounts.
Coinbase is broadening its spectrum of services by introducing Coinbase Index fund. With this development, the company can cater to new customers who are used to Index funds like the popular Dow Jones Industrial Average which sets the indices benchmark for financial markets.
Coinbase President and COO, Asiff Hirji, told CNBC:
“It’s a very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange”
Although, the service is not available to all customers. It is limited only to accredited U.S. investors with a net worth of at least $1 million or has a stable income of over $200,000 annually. The minimum investment to be made is $10,000.
The company executives explained the limited services by stating that the plan will be open to masses if the regulatory hurdles pass. Coinbase is not the first company to offer an index fund, Gray Scale, a digital assets tracking company has already introduced it for Bitcoins.
Coinbase Product Manager, Reuben Bramanathan said 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.”
Apart from Bitcoin, Bitcoin Cash, Ethereum and, Litecoin, which are currently available on the exchange, any addition of other coins with automatically be added to the index. The customers can invest on a monthly basis and withdraw every quarterly. But passively managed funds cannot be used for trading shares.
Reuben Bramanthan continues to say:
“We’re seeing strong demand from institutional and high-net-worth individuals.”