Wednesday, March 7, 2018

Coinbase expanding its exchange operation into asset management with a cryptocurrency ETF

The popularity of cryptocurrencies has led Coinbase to become not only the U.S.'s biggest cryptocurrency exchange, but also to become one of the country's biggest trading houses... even surpassing a major legacy broker in Charles Schwab.  So with this in mind, it doesn't seem too strange that what started out as a platform and model to help individuals trade in Bitcoin is now expanding into the realm of asset management to profit from the popularity of another financial instrument, that of Exchange Traded Funds (ETFs).

Only these won't be ETFs for stocks or stock indexes, but for a basket of cryptocurrencies.

Coinbase has already been dubbed the Goldman Sachs of Bitcoin. Now, the most popular U.S. cryptocurrency exchange will let you buy Bitcoin and other top cryptocurrencies listed on Coinbase through a new fund, rather than trading them directly on the exchange. 
In launching the Coinbase Index Fund Tuesday, the San Francisco-based startup—whose $1.6 billion valuation makes it the cryptocurrency industry’s most valuable—is entering the asset management business, positioning itself to become a much broader financial services firm, if not a full-blown bank. In November, Coinbase surpassed Charles Schwab in number of customer accounts. 
The index fund, which will invest in the same cryptocurrencies traded on Coinbase and its institutional exchange GDAX—currently including Bitcoin, Ethereum, Bitcoin Cash and Litecoin—will be available only to U.S. accredited investors, or those who have annual income of at least $200,000 or a net worth of at least $1 million. But Coinbase is hoping to launch a similar fund available to all investors regardless of wealth, likely structured as an exchange-traded fund (or ETF), pending regulatory approval. -  Fortune


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