Business 15 August 2018Erik Gibbs
Coinbase lowers fees to attract more institutional investors
Coinbase, the California-based cryptocurrency exchange and wallet provider, has a strong hold on the US crypto market. It is currently the largest in the country and hopes to remain the largest. In an effort to keep enhancing its offerings, Coinbase announced in a blog post Monday a few changes to its Index Fund that are certainly going to make current investors happy while attracting even more.
The fund will see its annual management fee reduced from 2% to 1% “for all new and existing investors.” According to the post, “We’re reducing our fee in order to attract investors who are familiar with lower-fee index funds in other asset classes. This will help introduce a new category of institutional investors into the cryptocurrency space.”
The Index Fund has also been rebalanced to support Ethereum Classic (ETC). Coinbase began listing ETC last week on its exchange and has plans to support five other digital currencies in the near future. These include Zcash (ZEC), Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM) and 0x (ZRX).
Coinbase introduced the Index Fund about two months ago, supporting the top four cryptocurrencies – Bitcoin Cash (BCH), Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). It is open only to accredited investors in the US who have a net worth of over $1 million or an annual salary of $200,000 or more. Additionally, only those who can invest between $250,000 and $2 million are eligible to participate in the fund.
The idea behind the introduction of the fund was to attract more institutional and other deep-pocket investors. It also rolled out a series of products in May targeting institutional investors and focusing on ensuring better security and regulatory compliance – concerns that may be preventing the investors from having enough confidence to enter the crypto space.
Last week, the company said that it would raise the daily purchase limits on its exchange to $25,000. It also now allows instant trading contingent upon the receipt of bank transfers. In order to take advantage of the enhancements, customers must have completed Coinbase’s identity verification procedures.
Coinbase was first launched in 2012. Since then, it has traded more than $150 billion worth of crypto and reported revenue of $1 billion last year.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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