US-based cryptocurrency exchange Coinbase has launched its much-awaited Index Fund on Wednesday, June 13, which takes all current and future assets listed on the platform. The fund is currently open only to crypto whales who could invest anywhere between $250,000 and $20 million in the fund. The fund is presently composed only of Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Other assets will be added to the listing soon.
Steal Deal for Crypto Whales
Large investors in the cryptocurrency markets are known to influence the prices significantly. The Index Fund was first announced in March. Coinbase Product Lead Reuben Bramanathan cited “overwhelming interest” from investors the primary reason behind the launch. The fund will give exposure to all assets listed on the exchange.
Coins added later will also become a part of the fund, as and when they start trading. A weighted calculation based on the market cap of each asset will determine the average value of the derivative.
The fund is composed majorly of Bitcoin, accounting for 61.49% of the total assets, followed by Ethereum, contributing 27.19%. Bitcoin Cash holds 8.27% of the assets, while 3.05% comes from Litecoin. The exchange recently listed Ethereum Classic as well, and it will soon be added.
New Product Launches Amidst Uncertainty
The platform will allow USD payments and provide a monthly investment window to the users. The users will pay a 2% management fee to the platform and will only be able to redeem funds on a quarterly basis after providing a 30-day notice.
The derivative is launched at a time when hacks and investigations by CFTC and SEC have become common in the young industry. Some exchanges are also being investigated for their involvement in Bitcoin price manipulations, including Bitfinex, which was charged with wash trading and spoofing.