2% fee is pretty high for an index fund.
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Coinbase Index Fund
171–180 of 346 posts
Re: Coinbase Index Fund
#172Dang, 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...
It’s been shockingly easy, actually! I do relatively few orders (2 per month) and can get a record of my filled orders [0] on the day I know my buys will occur.
I plug those automated buys into a spreadsheet where I maintain a record of my orders. That spreadsheet does a FIFO capital gains calculation, and I’m good to go.
I must admit, I haven’t sold yet, so I may just be niave about how 2018 taxes will go!
Re: Coinbase Index Fund
#173By having an index fund, are they saying crypto investing is safe now?
Re: Coinbase Index Fund
#174Reading the weighting section of the index fund ( https://am.coinbase.com/documents/cbi-methodology.pdf -- linked in a few sibling comments too) the following statement, while standard language and approach, makes me wonder in this case: "The market capitalization of each constituent asset is calculated as the price of the asset multiplied by the supply of the asset." There are always some small mistakes in the suppl…
How would that increase the nominal value of the fund? Worst it would do is inflate the market cap of a specific coin in relation to others, altering the weighting a little bit. They note there's no definitive way to calculate true supply so they aren't going to get in the business of trying to do so.
Re: Coinbase Index Fund
#175Reading the weighting section of the index fund ( https://am.coinbase.com/documents/cbi-methodology.pdf -- linked in a few sibling comments too) the following statement, while standard language and approach, makes me wonder in this case: "The market capitalization of each constituent asset is calculated as the price of the asset multiplied by the supply of the asset." There are always some small mistakes in the suppl…
If they adjust the price of the coins by removing lost coins from the supply (how would they even know with certainty which coins are lost, making this definition on their own would be going against the sanctity of the blockchain) then the price per coin would increase.
Re: Coinbase Index Fund
#176Earlier 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.
I already pay a premium[0] on GBTC over the underlying crypto so I can have easy exposure in my IRAs, and would gladly do so for ETH, LTC, BCH etc. 0. Average 52-week premium 56.18% https://www.bloomberg.com/quote/GBTC:US
For existing only 3 years in one of the greatest bull markets, it’s a little early to call the value in GBTC.
Re: Coinbase Index Fund
#177Earlier quoted context omitted.
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…
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.
My Average Joe brain is too small to calculate probability when there are a bunch of hands involved, much less one. It is, however, large enough to place bets on which cryptocoins might be more useful than others, based on a lot of data and current event news that I have access to.
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.
I don't recall Coinbase or any exchange promising anything. And trading is just that - trading. There are waves of ups and downs of supply and demand, of various volumes of buys and sells that lead to intraday, intraweek swings in which you can attempt to play your 'hand'. Even if you don't believe in the underlying security, you can attempt to ride those waves using technology provided to you by GDAX or Bittrex or whatever - the entire order book is laid out for you to learn and think about, and speculate on. That's easier to parse than odds for .. a blackjack hand? Even a roulette wheel probability play requires some basic training in probability.
The Casino ALWAYS wins, in aggregate.
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"
Okay, fine, so then regulate the 'telling' part and not the 'playing' part. I don't recall being told that the odds favor me. I was presented with an interface that let me purchase these coins. There were no words telling me what to do or not to do. The only people telling people what to do are peers and various Internet news sources that no one is obliged to follow.
Re: Coinbase Index Fund
#178Reading the weighting section of the index fund ( https://am.coinbase.com/documents/cbi-methodology.pdf -- linked in a few sibling comments too) the following statement, while standard language and approach, makes me wonder in this case: "The market capitalization of each constituent asset is calculated as the price of the asset multiplied by the supply of the asset." There are always some small mistakes in the suppl…
There is a concept in index weighting called float-adjusted where you remove shares that have not been issued.
that isnt really the same as what you are talking about, but it is a similar concept. The real problem would be finding out how many bitcoin exist or have been lost. I dont think there is any way to do that at this time.
Re: Coinbase Index Fund
#179If anyone's interested in a similar concept, Iconomi does a number of managed funds. I don't believe any are actual indexes (BLX comes closest with market cap weighted - https://www.iconomi.net/dashboard/#/daa/BLX) but they do cover a number of different crypto spaces.
Also Crypto20 does an index of the top 20:
Re: Coinbase Index Fund
#180I 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…
I had the same problems with re-balancing my own portfolio and ended up creating a trading bot that automatically diversifies my investment portfolio across the top 20 coins by market cap (10% capped). It is heavily inspired by the crypto20 whitepaper.
For anyone that is interested, you can find the project here: www.hodlbot.io
I'm about 1-2 weeks from the MVP launch. Only the top 20 coins by market cap fund will be available at the start. In the future users will be able to create their own custom weightings.
The bot requires users to have a Binance account and uses their API key (trade only, no withdrawal access), to execute monthly rebalances. Users will always own their own coins.
At this point, I haven't run into any huge issues with min trading amounts given a reasonable initial investment amount (~0.5 ETH). For example, the NEO example you mentioned.... the min trading amount on Binnace is actually 0.01 NEO (~$1.1 USD).
I'll be making the project open source in the future and sharing with you all!