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Coinbase to Shut Down its Index Fund After Four Months of its Launch

October 12, 2018 12:36
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In a surprising development, Coinbase is reportedly shutting down its index fund almost after four months of launch due to a weak investor response. The exchange will now rather focus on new retail offerings, known as Coinbase Bundle in a bid to attract more retail investors.

Coinbase launched the crypto index fund “equivalent to the S&P 500 index” in June this year targetting HNI clients to allocate a minimum investment of $250,000 to up to $20 million to this fund. The index fund was a part of the company’s strategy to target high-stakes players and institutional investors. The decision to close the index fund is in contrast with the exchange’s earlier announcement that the fund is receiving an overwhelming response from investors.

At the launch, the fund was criticized and some investors expressed worries about fees and lack of support for a wide range of crypto assets which the exchange addressed it by reducing management fees by 50% to 1% annually. The exchange also rebalanced the portfolio with the addition of new coins following listing of additional tokens.

The news of shutting down the index fund comes soon after Adam White, exchange’s head of institutional division left the company. This development also indicates the company’s shift of strategy to focus on more new retail offerings. The Coinbase Bundle, one of the exchange latest offering to the retail investors aims to simplify cryptocurrency trading in which investors can buy as little as $25,£25, or €25.

Coinbase is not alone in the space which is facing difficulty in attracting investors to survive this difficult market. London’s oldest crypto exchange Coinfloor announced laying off a majority of its workforce amid slowing market condition and Indian exchange Zebpay announced its closure due to uncertain regulatory conditions.

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