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Author Topic: Bitcoin exchange Coinbase launches the Dow Jones Index of cryptocurrencies  (Read 32 times)
alyssa85
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March 07, 2018, 11:45:00 AM
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https://www.cnbc.com/2018/03/06/bitcoin-exchange-coinbase-launches-the-dow-jones-of-cryptocurrencies.html

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Popular online exchange Coinbase is releasing a weighted index fund for cryptocurrencies.

"It's a very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange," Coinbase President and COO Asiff Hirji told CNBC's "Fast Money" Tuesday.

The Coinbase Index Fund will give accredited U.S. investors exposure to all assets listed on the company's current exchange, GDAX. The currencies will be weighted based on market capitalization.

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March 07, 2018, 12:13:18 PM
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I don't like the idea, because people will start investing in the Index, but if it have mid-cap coins, it will be too easy to manipulate.

IMO Indexes must stay out of crypto-currencies.


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davis196
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March 07, 2018, 12:32:17 PM
 #3

I don't like the idea, because people will start investing in the Index, but if it have mid-cap coins, it will be too easy to manipulate.

IMO Indexes must stay out of crypto-currencies.

They aren`t talking about people,they are talking about "accredited U.S. investors",which means institutional investors,i guess.It`s just another way for Coinbase to find investors,who will fund their future projects.
First,there were bitcoin futures contracts trading ,and now a crypto index.It looks like cryptocurrency trading will become similar to Wall Street stock trading. Grin

alyssa85
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March 07, 2018, 12:40:47 PM
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I don't like the idea, because people will start investing in the Index, but if it have mid-cap coins, it will be too easy to manipulate.

IMO Indexes must stay out of crypto-currencies.

There is no way to keep them out. People love investing in indexes because they think they are "safe". Pretty soon we're going to see an ETF based around this index as well.

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March 07, 2018, 12:43:57 PM
 #5

This is fantastic.
This is the first step for altcoins ETF.

You have to look at the bigger picture.

Index funds are amazing. There are many studies that show that they are have better historic perform than active funds.
Institutional money is looking for this.

The limitation is that only coinbase altcoins are weighted in this index. I hope we have similar initiatives soon, but based on CMC.

This could lead to:
Top 10 Cryptocurrencies Index ETF
Top 5 Cryptocurrencies Index ETF

Very good news. Thanks for sharing.

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March 08, 2018, 05:34:04 AM
 #6

This is an interesting point.

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Coinbase is the leading U.S. marketplace for buying major cryptocurrencies. Its GDAX exchange for professional traders offers bitcoin, bitcoin cash, litecoin and ethereum. It does not currently offer ripple, or XRP.

The company has been cautious when adding new currencies to the exchange, and is working to avoid any "rubbish out there", Hirji said.

They say they're actively working to avoid adding "rubbish" currencies but I think some might argue bitcoin cash is one of the biggest "rubbish" currencies out there adding little value to bitcoin or crypto in while diluting/diminishing their net worth. There could be a respectable amount of politics in play here. Coinbase could utilize their high market share and influence towards legitimizing or delegitimizing certain altcoins via whether or not they're listed on coinbase's index. This index could be utilized as a means of controlling which altcoins are legitimate.

I doubt this will do anything to make progress on a bitcoin ETF. Any bitcoin or crypto website which provides financial charts could probably create their own crypto indexes. There is no set standard and coinbase's index won't necessarily be any more credible or legitimate than anyone else's. The only reason coinbase has a chance of legitimizing an index involves them having a large percentage of market share and the largest userbase but it is possible that will come to an end if japan and other nations get involved, which could suggest whatever index coinbase creates will be short lived.

Also coinbase could lose market share over time as users flock to other exchanges which offer a wider selection of crypto as well as in the case of exchanges like robinhood, lower trade commissions.

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