I am mystified as to why coinbase is not performing float or liquidity adjustments.
Coinbase Index Fund
191–200 of 346 posts
Re: Coinbase Index Fund
#192I 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…
Shouldn't this be pretty simple with an API and a basic script? You can get the overall market cap and percentages based on something like Coinmarketcap and then just set limit orders to buy/sell rounded to nearest coin requirement.
It’s easier than that. Just buy the 4 coins in their current market cap proportions and revisit once/year.
Re: Coinbase Index Fund
#193For anyone wondering why this is better than just buying the coins yourself, here are some reasons: 1. Non-technical investors don't know which coins to buy. There are some genuinely good coins, and lots of scams, and they look pretty much identical to the untrained eye. 2. Non-technical investors don't know how to store coins safely. Words like "cold wallet" and "Trezor" don't mean anything to them. Even if they wan…
You'll still have to pay taxes on capital gains if you have shares of a mutual fund. There will be capital gains/losses generated any time a mutual fund buys or sells the underlying assets (for example, if shareholders liquidate their shares, and there's not enough cash on hand to pay them). Mutual fund managers are required to pay out these capital gains to shareholders on a regular basis. These get reported to you (and the IRS) on a 1099-DIV as "capital gains distributions", and you report them on your tax return for that year.
The fund may try to minimize trading to be tax-efficient, but this may not always be possible. For example, if asset prices drop suddenly and lots of investors try to cash out, the fund may be realizing (and distributing) large capital gains if it's forced to liquidate assets that it has held for a long time. If it's forced to liquidate assets that it has held less than a year, you'll get a short term capital gains distribution which is taxed like ordinary income. (Of course, when you sell your own shares, you'll incur a long/short-term capital gain or loss based on the difference between your sales and purchase price.)
More information on capital gains distributions can be found here: https://www.investopedia.com/terms/c/capitalgainsdistributio...
Re: Coinbase Index Fund
#194"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.
Gambling is one of the most heavily regulated businesses on the planet.
Re: Coinbase Index Fund
#195When Coinbase adds a new coin, will they buy the coins for the fund before or after the announcement? If before, then this fund would actually be useful as a way to front run the market. But I'm guessing it would be after.
Re: Coinbase Index Fund
#196Earlier quoted context omitted.
>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%
2% is a massive fee. That is almost reaching hedge fund levels.
For what is pretty much a passively managed fund it seems hard to justify such a high fee.
Re: Coinbase Index Fund
#197Earlier quoted context omitted.
Yes. You can only buy this if you can show income over 200k USD for the past 2-3 years (or meet other criteria which are less common for people on HN). https://www.investopedia.com/terms/a/accreditedinvestor.asp
The HN community has fairly high net worth on average, I wouldn’t be surprised if a good amount here were accredited.
My guess is that there are a lot of young people on HN who may have negative net worths - just got out of college a couple of years ago and still paying off student loans. Probably more of those here than there are millionaires.
Re: Coinbase Index Fund
#198I 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…
The greatest gains are not long since gone or we'd already have perfectly working dApps.
Re: Coinbase Index Fund
#199Earlier quoted context omitted.
"I.e., those other things you listed exist “within” the US financial system. Cryptocurrencies exist outside of it" No, they don't. They're no more "outside it" than gold or silver are.
Your intuition is coming from seeing things as being in an equivalence-class on some axis of comparison—but you're looking at the wrong axis. Gold and silver mined within the US exist within the US financial system, because it's US companies doing the mining, who sell the resulting commodities to other US companies, who then list them on US exchanges, etc. The US government can boss around all of these US companies —…
No. All of that is just an extremely convoluted way of trying to be cute and get around tax laws, which any judge would immediately shut down just like the "sovereign citizen" stuff. Sorry, but there is no cheat code for taxes.
Re: Coinbase Index Fund
#200Kudos to Coinbase for launching this but a 2% fee and the fact that Coinbase is far from being trustworthy in my book I am going to wait for when/if a company like Vanguard starts such a fund.
Yeah, at 2% this is more akin to a mutual fund.
Forget mutual funds. That's closer to a hedge fund.