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Coinbase Index Fund

blog.coinbase.com

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Re: Coinbase Index Fund

#181

Post by haggenballs »

rektlessness wrote: post #136
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…

I suggest those interested in Crypto Index Traded Funds to look into Crypto20. This fund provides a way to track the performance of the crypto markets as a whole by holding a single crypto asset. "Crypto20 is a tokenized, closed-end index fund (CEF) which passively tracks the top twenty cryptocurrency assets by market capitalisation. All profits are reinvested into the fund." Here is the link to the whitepaper for th…

One thing I really don't like about Crypto20 is this:

"The liquidation option offers a price floor protection – this ensures the price never drops below that of the underlying assets because of market manipulation. Prices are, however, free to increase as speculative value is created by the high demand for a low-cost, diversified and automated cryptocurrency portfolio that can be held as a single token"

A unit of Crypto20 can be trading at a premium to the actual underlying assets.

Re: Coinbase Index Fund

#182

Post by jgh »

cocktailpeanuts wrote: post #90

"Index fund" has a meaning if the economy itself the fund is built on top of is stable. For example, stock market index fund makes sense because stocks are built on top of capitalism, which has proven to work for a long time. Nobody would buy a index fund from a communist country, because time has proven communism is not profitable. I think people are missing the point if they're investing in crypto index funds, beca…

There are index funds for pretty much anything you can build an index out of. Hell, there are index funds on an endless downward spiral[1]. Intentionally.

[1]:https://finance.yahoo.com/chart/VXX

Re: Coinbase Index Fund

#183

Post by ericd »

solarkraft wrote: post #132
froindt wrote: post #109

Earlier quoted context omitted.

I'm admittedly not up on rebalancing policies. With a fund of highly volatile assets, would rebalancing more frequently be necessary? I'm not thinking daily, but perhaps every month or so?

I believe so. The worth of your portfolio is the worth of the assets. Bitcoin dropped a ton in even a month. There are still changes of a few percent possible in less than a day, so yearly balancing sounds insanely dumb to me.

Index funds are usually market cap weighted, so day to day changes in value don't require rebalancing, since if a security suddenly doubles, its market cap does too, and it's therefore still held in the correct proportion to the other securities in the index.

Re: Coinbase Index Fund

#185

Post by cocktailpeanuts »

jgh wrote: post #182
cocktailpeanuts wrote: post #90

"Index fund" has a meaning if the economy itself the fund is built on top of is stable. For example, stock market index fund makes sense because stocks are built on top of capitalism, which has proven to work for a long time. Nobody would buy a index fund from a communist country, because time has proven communism is not profitable. I think people are missing the point if they're investing in crypto index funds, beca…

There are index funds for pretty much anything you can build an index out of. Hell, there are index funds on an endless downward spiral[1]. Intentionally. [1]: https://finance.yahoo.com/chart/VXX

That's totally in line with my argument. When you say "pretty much anything", that's "pretty much anything tradable with what we consider money".

Cryptocurrency is a completely different class of currency than what we are accustomed to (bank backed money), so this argument exists on a completely different level.

Re: Coinbase Index Fund

#186

Post by thinkmassive »

haggenballs wrote: post #180
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…

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…

> The bot requires users to have a Binance account ... (trade only, no withdrawal access)

> Users will always own their own coins.

To be fair, users do not actually own the coins if Binance owns the coins.

Sounds like a cool bot though, and great looking site! I signed up for the private beta. Looking forward to the open source!

Re: Coinbase Index Fund

#187

Post by cleyon3 »

haggenballs wrote: post #180
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…

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…

This sounds like a pretty interesting application of crypto20, when are you planning to go live & do you have any early access?

Re: Coinbase Index Fund

#188

Post by srik »

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…

Binance lets you get NEO under 1 unit. and they workout the math so you a proper share of the gas as well.

Re: Coinbase Index Fund

#190

Post by [deleted] »

nwellnhof wrote: post #140
froindt wrote: post #109

Earlier quoted context omitted.

I'm admittedly not up on rebalancing policies. With a fund of highly volatile assets, would rebalancing more frequently be necessary? I'm not thinking daily, but perhaps every month or so?

A fund weighted by market cap doesn't have to be rebalanced. With crypto assets, you only have to adjust for newly mined coins. The Bitcoin supply, for example, is currently growing at about 4% per year. But if the other currencies in the Coinbase Index are mined at a similar rate, yearly rebalancing should be accurate enough.

[deleted]
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