The cryptocurrency market has had a very unfriendly 2018.
The bearish sentiment has dominated price movements and it has looked as if the bears have a tight grip.
However, with developments elsewhere, it feels as if there’s more money than is being poured into crypto assets.
Are these bears genuine when you consider that Coinbase’s Index Fund can easily raise $20 million from an investor?
Coinbase Index Fund buys and holds cryptocurrency assets for investors. It provides a “vault-like” protection on behalf of clients who’ve been afraid of losing their assets.
According to Coinbase, there has been huge interest from the investor community since the exchange announced the Index Fund earlier in the year.
As of now, they “have opened the fund to those who wish to invest $250,000 to $20M.”
Even as the market reels from the effects of a bearish year, Coinbase has been making money off crypto funds.
Its custody set up for investors is quite lucrative. For instance, the exchange charges clients $100,000 as a setup fee.
On top of that, it charges at least 10 basis points for custody per month.
This brings up a total of $10 million as the minimum monthly balance. Isn’t this huge money? Crypto bears are notified, the market is about to change.
Coinbase sees huge growth in this sector. It recently tweeted that:
“Index funds have changed the way that many people think about investing, providing diversified exposure to a broad range of assets in one tool. We’re looking forward to giving clients the ability to invest in the potential of blockchain-based digital assets.”- Coinbase
And demand keeps growing from US investors who want custody for their crypto-related assets. Reuben Bramanathan, the product manager for the CIF spoke to Fortune, stating that:
“We’re expecting huge demand from retail when that’s available, and we want to be in a position to accept that demand.”
The index fund will allow investors to put their money in the crypto assets offered on Coinbase and GDAX.
These are Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. At the moment, the opportunity is only available to accredited investors in the US.
These investors will be required to also show that they have a $200k annual income or a net worth of $1 million.
With such money flowing into the Fund, one may be tempted to wonder why the market is too bearish.
This is despite the view that Wall Street was to pour man into the crypto industry.
But things could soon change for crypto.
Indications are that Coinbase is waiting for approval that will allow it to offer the custodian services within the law.
When this happens, it’s likely to pave the way for an influx of investors into cryptocurrency investment.
The increased interest in crypto will see prices steady, relieving the effects of the bearish run.
If regulated cryptocurrency custody is more or less going to bring in more buyers. Crypto will welcome hedge funds and pension firms, releasing money into a fledgling industry.
According to Coinbase’s Sam McIngvale, “about $20 billion in crypto assets are poised to flow into custody services once they’re available”.
With this initiative, Coinbase is living up to its tag as the “Goldman Sachs” of Bitcoin.
The Index fund is growing in appeal and as Coinbase seeks approval from US regulators, the question is why the market should continue to give in to the bears.
The market is still in a downtrend, expected to remain so in the short-term. And even though a sort of bottom has been touched by Bitcoin, nothing but huge money will do.