Coinbase Closes Down Its Cryptocurrency Index Fund Product
The popular cryptocurrency exchange company Coinbase is saying “goodbye” to its crypto index fund product after only a few months. Aimed at institutional investors, the index fund was launched earlier this year and allowed for investments between $250,000 and $20 million. According to The Block the product is being shut down due to lack of interest, with the product failing to attract enough clients to be viable.
Launched this past June, the Coinbase Index Fund included popular cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and others. Coins in the fund were weighted by market value. Additionally the company had stated plans to bring additional coins to the index fund over time.
In a statement obtained by Coindesk, a Coinbase spokesperson said, “After assessing demand from retail, accredited and institutional investors, Coinbase has decided to shut down Coinbase Index Fund. We will focus on providing diversified exposure to all investors through Coinbase Bundle.” That product is similar to the index fund concept in that it allows users to purchase a mix of cryptocurrency assets. Unlike the index fund product, however, Coinbase Bundle does not bear an accreditation requirement. Moreover the Bundle product has just a $25 minimum — a far cry from the index fund’s $250,000 floor.
The apparent failure of Coinbase’s crypto index fund would seem to jive with the narrative that some investors are giving up on cryptocurrencies for the time being. This theory has also been used to explain the recent stable-streak Bitcoin has seen where volatility has reached a 17-month low. Then again, Coinbase may have simply overestimated the demand for such a high-dollar product in what has been a ho-hum crypto market as of late.
As for the Coinbase Bundle, The Block notes that similar products are already available from other companies. For example they point to Circle Invest, which offers a mix of 11 different tokens that can be purchased for as little as $10. Despite that, it does seem that this is a better bet for Coinbase and could appeal to crypto newbies — especially now that prices have come back to Earth. Ultimately, with Coinbase being a leader in the crypto space, hopefully this misstep doesn’t signal further issues for crypto moving forward.