Coinbase Index Fund • Hacker News Board

Re: Coinbase Index Fund

#31

Post by dnautics » Tue, Mar 06, 2018, 11:20 PM UTC

ryanlol wrote: post #22

joncrane wrote: post #12

Earlier quoted context omitted.

That 2% figure seems high. I know transaction costs in cryptocurrencies tend to be high by financial standards. Maybe that accounts for it. Also maybe by being one of the first to offer such a thing, they can charge higher management fees.

>I know transaction costs in cryptocurrencies tend to be high by financial standards. What would be a normal transaction cost by financial standards?

Charles Schwab, which is relatively high, charges $8/trade (for unmanaged trades).

Re: Coinbase Index Fund

#32

Post by supermdguy » Tue, Mar 06, 2018, 11:21 PM UTC

machinecontrol wrote: post #24

Couldn't anyone just copy the composition of this fund and buy the same cryptos themselves without paying management fees or being locked in to Coinbase?

Yes, but it would take a lot of work, and would need to be updated whenever market share for a coin changes.

Re: Coinbase Index Fund

#33

Post by Klathmon » Tue, Mar 06, 2018, 11:21 PM UTC

JumpCrisscross wrote: post #13

conanbatt wrote: post #6

Earlier quoted context omitted.

Automatic and cheap balancing. Its a great business for coinbase: if it had plenty of investors, then they have a very definite measure on what to ask coin makers before putting their coin on their exchange. Figure they can ask 10% of the outstanding tokens in exchange for the legitimacy that will pump the coin sky high.

> Automatic and cheap balancing For someone unknown definition of “balancing.” (Rebalancing and re-weighting or re-constituting are different things.)

It's only "unknown" if you refuse to read.

https://am.coinbase.com/documents/cbi-methodology.pdf

Edit: sorry, this came across more aggressive than I meant for it to be!

Re: Coinbase Index Fund

#34

Post by conanbatt » Tue, Mar 06, 2018, 11:21 PM UTC

JumpCrisscross wrote: post #13

conanbatt wrote: post #6

Earlier quoted context omitted.

Automatic and cheap balancing. Its a great business for coinbase: if it had plenty of investors, then they have a very definite measure on what to ask coin makers before putting their coin on their exchange. Figure they can ask 10% of the outstanding tokens in exchange for the legitimacy that will pump the coin sky high.

> Automatic and cheap balancing For someone unknown definition of “balancing.” (Rebalancing and re-weighting or re-constituting are different things.)

They put the guidelines of what they consider balancing.

Re: Coinbase Index Fund

#35

Post by userhacker » Tue, Mar 06, 2018, 11:22 PM UTC

Meekro wrote: post #14

an4rchy wrote: post #3

Interesting. The fund creates another potential source of revenue for them and at the same time, the more people that invest in it, the higher it's likely to go. Why would anyone choose to invest in a fund that is basically the same as investing in the 4 currencies they currently support directly (without fees or limitations on trading)?

If you bought the 4 currencies yourself, you'd have to pay capital gains taxes each time you rebalance.

unless you change your holdings into fiat thats not the case. You can rebalance with exchanging among your coins

Re: Coinbase Index Fund

#36

Post by conanbatt » Tue, Mar 06, 2018, 11:22 PM UTC

AndrewGaspar wrote: post #25

"Available to US accredited investors." It seems a little ironic that any Joe Blow with a credit card can buy cryptocurrency, at presumably higher risk since he's managing the assets himself, but he can't invest in this fund.

Thank you SEC!

Re: Coinbase Index Fund

#37

Post by mmanfrin » Tue, Mar 06, 2018, 11:23 PM UTC

sagivo wrote: post #15

I don't see the value here. I can simply buy it on Gdax weighted by market capitalization and save the 2% annual management fees.

Yep, and you don't have to be an accredited investor. And your money is available the moment you sell, rather than waiting for it to sell.

Re: Coinbase Index Fund

#38

Post by [deleted] » Tue, Mar 06, 2018, 11:24 PM UTC

supermdguy wrote: post #32

machinecontrol wrote: post #24

Couldn't anyone just copy the composition of this fund and buy the same cryptos themselves without paying management fees or being locked in to Coinbase?

Yes, but it would take a lot of work, and would need to be updated whenever market share for a coin changes.

[deleted]

Re: Coinbase Index Fund

#39

Post by tyrust » Tue, Mar 06, 2018, 11:24 PM UTC

supermdguy wrote: post #32

machinecontrol wrote: post #24

Couldn't anyone just copy the composition of this fund and buy the same cryptos themselves without paying management fees or being locked in to Coinbase?

Yes, but it would take a lot of work, and would need to be updated whenever market share for a coin changes.

The index currently contains 4 coins. Quarterly (or monthly if you really would like) balancing of 4 assets would not be that difficult.

Re: Coinbase Index Fund

#40

Post by paulie_a » Tue, Mar 06, 2018, 11:24 PM UTC

ryanlol wrote: post #22

joncrane wrote: post #12

Earlier quoted context omitted.

That 2% figure seems high. I know transaction costs in cryptocurrencies tend to be high by financial standards. Maybe that accounts for it. Also maybe by being one of the first to offer such a thing, they can charge higher management fees.

>I know transaction costs in cryptocurrencies tend to be high by financial standards. What would be a normal transaction cost by financial standards?

Robinhood charges zero