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Coinbase readies its own passively-managed cryptocurrency index fund

Coinbase has announced its plans to launch a passively managed cryptocurrency index fund, which will see a 2% annual management fee.

Coinbase today has announced the entry of a new product to tackle the burgeoning cryptocurrency customer experience through the development of a new passively-managed index fund.

The fund, which will launch with a $10,000 USD minimum investment and will charge a 2% annual management fee (and no performance fee), will become the first investment vehicle developed from Coinbase’s new asset management division.

The fund will include all digital currencies listed on GDAX weighted by market cap, and at launch will be constituted by 62 percent Bitcoin, 27 percent Ethereum, 7 percent Bitcoin Cash and 4 percent Litecoin.

The fund will rebalance once a year to account for supply changes, and whenever a new asset is listed on GDAX.

Interested investors can launch their initial foray in either USD or in any of the included digital currencies so long as an investor surpasses a $10,000 USD minimum investors and is both an accredited US-based investor. Coinbase has confirmed that it hopes to remove such restrictions from future funds.

The company has confirmed that all funds will be held in cold storage, and at present it remains unclear as to how the fund might interact with Coinbase’s existing Custody product.

Presiding over the launch on CNBC’s Fast Money, Coinbase President Asiff Hirji quipped that the new index fund represents a “very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange”.

In a statement to Fortune, index fund product lead Reuben Bramanathan offered that “We are working towards funds that will be available to all retail investors… We’re expecting huge demand from retail when that’s available, and we want to be in a position to accept that demand.”

While Coinbase joins the likes of Bitwise Investments and Inconomi in developing a cryptocurrency index fund, the firm’s new foray might be enough to tease the interest of committed investors based in the United States.

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