Coinbase Index Fund • Hacker News Board

Re: Coinbase Index Fund

#151

Post by techman9 » Wed, Mar 07, 2018, 1:43 AM UTC

ahtu123 wrote: post #81

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 "index fund" is made out of four currencies, BTC, ETH, LTC, BTC cash. Just buy a bunch of those and you're "investing" in their "index". Also you don't have to pay their fee for their immense expertise in putting this together.

To be fair, it's market cap weighted. You could just buy every stock on the S&P too, but lots of investors prefer VOO.

Re: Coinbase Index Fund

#152

Post by sokoloff » Wed, Mar 07, 2018, 1:46 AM UTC

ericmcer wrote: post #68

aneesh wrote: post #8

That chart is log-scale. The index fell by more than half between December and February, but you wouldn't know it by glancing at the chart.

Good eye, that is sketchy. The entire industry seems to be floating on FOMO right now though, so it definitely serves that purpose.

It should be labeled or otherwise shown, but I think that semi-log is the most appropriate choice of scale for long-term price change graphs like this. I can buy linear-linear for intraday charts, but anything long-term should be log-linear IMO.

Re: Coinbase Index Fund

#153

Post by tomkarlo » Wed, Mar 07, 2018, 1:46 AM UTC

mancerayder wrote: post #148

arcticbull wrote: post #104

Earlier quoted context omitted.

At the casino your risks are known, and well-defined. In blackjack with basic strategy your expected value is, what, 49%? Craps, it's similar. Just look it up. Nobody at the table playing, or even running the show, can manipulate the outcome except by changing the parameters of the game as posted in the (I assume) regulated odds boards. Investing in an unregulated market is absolutely nothing like that. Your outcome…

But don't they, even in Blackjack, use multiple card decks to kill the odds calculation unless you're Rain Man? Sorry, but if cryptocurrency is prone to manipulation and fraud (it is), casinos are tens times worse because not only do they do that, as the House must win as a business strategy, but they appeal to people who have addiction issues. I'm not against casinos but to defend them against cryptocurrency trading…

That's to make it difficult for a player to calculate the odds of a particular hand. The odds of the overall game are still pre-defined and regulated.

Casinos can't/won't promise that you'll make money by playing their games. Securities are generally purchased with the expectation that you'll make money, and are marketed up to the allowable line of suggesting they are good ways to make money.

Allowing people to play a game where the odds are openly against them, vs. buying a security where they're being told the odds favor them but it may be otherwise, are very different propositions when you're asking if they're "fraud".

Re: Coinbase Index Fund

#154

Post by trophycase » Wed, Mar 07, 2018, 1:47 AM UTC

I wish that I could choose my own percentage weighting (rather than a market cap based weight) and have it rebalance to whatever that is. Seems like a good service for users who couldn't write it themselves.

Re: Coinbase Index Fund

#155

Post by tomkarlo » Wed, Mar 07, 2018, 1:50 AM UTC

Zelphyr wrote: post #84

bufferoverflow wrote: post #60

Earlier quoted context omitted.

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.

The Libertarian in me agrees but then I think of the psychology of how people approach casino gambling vs business investing. For the former, I feel like people know going in that the odds are in favor of the house and they come to terms with that by saying to themselves that its entertainment. In other words, they kind-of expect to get screwed. In business investing its the opposite. They really do think they stand…

Generally any compliant securities issuance will have something to this effect - the "Risk Factors" section. The problem is it's often drowned out the broader hype of an offering, or a seller will say "they make us say that, don't worry about it."

Unscrupulous issuers have historically targeted less-sophisticated buyers who are less likely to be experienced investors - and also less likely to retain their own counsel to review an offering. Hence the accredited req.

Re: Coinbase Index Fund

#156

Post by techman9 » Wed, Mar 07, 2018, 1:50 AM UTC

PNWChris wrote: post #119

Dang, I was looking everywhere for something like this just a couple months ago! I ended up digging through the GDAX API docs, writing a node script, and scheduling it [0], but I'd rather not be in the business of script maintenance. The fees and accredited investor requirement will keep me with what I've got, though :/ [0]: https://www.chrisjeakle.com/projects/#gdax-automation

Oh man, I do not envy your tax situation...

Re: Coinbase Index Fund

#157

Post by jartelt » Wed, Mar 07, 2018, 1:55 AM UTC

techman9 wrote: post #151

ahtu123 wrote: post #81

Earlier quoted context omitted.

This "index fund" is made out of four currencies, BTC, ETH, LTC, BTC cash. Just buy a bunch of those and you're "investing" in their "index". Also you don't have to pay their fee for their immense expertise in putting this together.

To be fair, it's market cap weighted. You could just buy every stock on the S&P too, but lots of investors prefer VOO.

You can't easily go buy a fraction of every stock in the S&P 500 whereas I can easily go buy a fraction of the coins in the Coinbase index. This means it is easy for me to go turn $100 into a market cap weighted index of the 4 coins on Coinbase, but it would be impossible for me to go turn $100 into fractional shares of all the companies in the S&P 500.

Re: Coinbase Index Fund

#158

Post by throwaway1748 » Wed, Mar 07, 2018, 1:58 AM UTC

justinalanbass wrote: post #61

I have attempted to duplicate this index fund manually by purchasing the top 25 cryptocurrencies (market-cap weighted) over the past year or so. I'll say that it was hardly worth the enormous work involved, and these index funds cannot come soon enough to non-accredited investors. In some cases it's not possible to do perfectly alone: NEO has a minimum unit of 1 coin, and so if you wanted it to not be overweighted, y…

There are also great disadvantages from owning coins yourself, like physical security.

Re: Coinbase Index Fund

#159

Post by throwaway1748 » Wed, Mar 07, 2018, 2:00 AM UTC

JustAnotherPat wrote: post #74

justinalanbass wrote: post #61

I have attempted to duplicate this index fund manually by purchasing the top 25 cryptocurrencies (market-cap weighted) over the past year or so. I'll say that it was hardly worth the enormous work involved, and these index funds cannot come soon enough to non-accredited investors. In some cases it's not possible to do perfectly alone: NEO has a minimum unit of 1 coin, and so if you wanted it to not be overweighted, y…

>Coinbase Index Fund will invest in assets in proportion to their relative market capitalizations and rebalance annually on January 1st. This thing is rebalanced only once a year. Would take 5 minutes to actually duplicate this fund since it's only 4 coins....

Presumably they'll be launching many more coins this year. There are other advantages in holding crypto through a fund rather than directly, like simplified tax accounting and not having to worry about security, either digital or physical.

For many people that is worth 2%

Re: Coinbase Index Fund

#160

Post by themagician » Wed, Mar 07, 2018, 2:00 AM UTC

bufferoverflow wrote: post #60

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.

Lol. It’s not about risk, it’s about keeping poor people out of the market. It’s why they are trying to change the rules to make it even harder—because there are simply too many people with a million in cash liquidity today. Can’t have that.