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Coinbase Index Fund

blog.coinbase.com

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Re: Coinbase Index Fund

#51

Post by habosa »

Kind of sad when a major player likes Coinbase invites the pure speculators in. Yes I know that 99% of people were just speculating before but at least they had the possibility of transferring their crypto assets off the exchange and using them for something. Now it's just some magic number you can root for. It's no more interesting or decentralized than any other financial instrument.

When you think about it, crypto currencies may have been too successful. The market got so big that it has to start looking like every other financial product instead of something different with a chance to shake up finance.

Re: Coinbase Index Fund

#52

Post by Klathmon »

userhacker wrote: post #35
Meekro wrote: post #14

Earlier quoted context omitted.

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

This is a somewhat debated topic in cryptocurrency. IMO what you said is not the case.

If gold and silver aren't treated "like kind", and facebook and google stocks aren't treated "like kind", why would bitcoin and ethereum be treated like kind?

I'm not a tax professional, but I did consult with one, and they confirmed my hunch.

Re: Coinbase Index Fund

#53

Post by JumpCrisscross »

Klathmon wrote: post #33
JumpCrisscross wrote: post #13

Earlier quoted context omitted.

> 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!

Pardon me, the construction is as transparent as something like this can be, i.e. generally, whatever their committee feels like. My qualm is with the word “balancing” which implies diversification as this term is used within portfolio theory. You can’t balance a book of correlated assets. (You can track them, which this index tries to do.)

Re: Coinbase Index Fund

#54

Post by zone411 »

Coinbase also confirmed on CNBC that their transaction volumes are lower compared to the peak in Dec/Jan - matches up well with lower transaction volumes in Bitcoin and Ethereum (despite transaction costs going down), fewer new wallets created daily, and fewer searches (Google Trends).

Re: Coinbase Index Fund

#55

Post by ttoinou »

From this post :

  Coinbase Index is a measure of the financial
  performance of all assets listed on GDAX,
  weighted by their market capitalization.
Methodology : https://am.coinbase.com/documents/cbi-methodology.pdf

  The index level for CBI is calculated by dividing
  the sum of the current USD market capitalizations
  of all constituent assets by the Divisor
I don't see how anything is weighted, it's just the sum of capitalizations expressed in USD divided by a weird divisor they control to keep the index smooth

Re: Coinbase Index Fund

#56

Post by asdsa5325 »

charlesdm wrote: post #9
myroon5 wrote: post #5

Seems dishonest to not use a linear scale on this graph: https://am.coinbase.com/index Also, the minimum investment and management fee found here don't look too appealing: Minimum Investment: $10,000 2% annual management fee https://am.coinbase.com/#invest

You forget it's automated. I think plenty of HNWIs are willing to pay 2% management fee to be able to invest in a diversified crypto index fund.

2% fee is pretty high, I don't think so.

Re: Coinbase Index Fund

#58

Post by asdsa5325 »

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?

You seem to be confusing transaction costs and management fees

Re: Coinbase Index Fund

#59

Post by evrydayhustling »

iMuzz wrote: post #46

There are many people ("traditional" hedge fund managers) outside of the crypto world that want "exposure" without having to figure out which ones to pick. This seems like a perfect product for them. But from what I understand.. If $100 in invested into the index fund, $67 of bitcoin is bought, $27 of Ethereum, $7 of Bitcoin Cash, and $4 of Litecoin. Bitcoin - 62% Ethereum - 27% Bitcoin Cash - 7% Litecoin - 4% Doesn'…

Yes, by design! The most traditional way of deciding index weights is by market capitalization: if the world has thus far allocated more to Bitcoin than Ethereum, the index will too. Besides concurring with past "wisdom", this method minimizes management overhead. If Ethereum doubles in price tomorrow, so that by market capitalization it should have similar weight to Bitcoin, the index will already be "in position" because the value of it's eth holdings will have doubled alongside.

Re: Coinbase Index Fund

#60

Post by bufferoverflow »

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.

This whole regulation is unneeded. You can bring your money to a casino and put it all on zero. Or buy a thousand lottery tickets. But investing in risky businesses needs to be walled off to the wealthy.

What we really need is the real consequences for fraud / false financial claims.

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