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Seems dishonest to not use a linear scale on this graph: https://am.coinbase.com/index https://am.coinbase.com/index Also, the minimum investment and managemen
by myroon5 9y ago
Seems dishonest to not use a linear scale on this graph:
https://am.coinbase.com/index https://am.coinbase.com/index
Also, the minimum investment and management fee found here don't look too appealing:
Minimum Investment: $10,000
2% annual management fee
https://am.coinbase.com/#invest https://am.coinbase.com/#invest
- charlesdm 9y agoYou forget it's automated. I think plenty of HNWIs are willing to pay 2% management fee to be able to invest in a diversified crypto index fund.
- sparky_ 9y agoFor fellow non-native speakers: HNWI = High Net-Worth Individual
- asdsa5325 9y ago2% fee is pretty high, I don't think so.
- jacques_chester 9y agoCryptocurrencies have characteristics of other high-risk assets -- diamond mines in war-torn regions, shares in politically unstable countries, bonds of provinces or states with a history of defaulting, venture capital, exotic commodities trading etc etc. The risk is higher, the volatility is higher, liquidity is lower, the overall market is at an early stage of development. For such asset classes, paying a fat premium is common.
- joncrane 9y agoThat 2% figure seems high. I know transaction costs in cryptocurrencies tend to be high by financial standards. Maybe that accounts for it. Also maybe by being one of the first to offer such a thing, they can charge higher management fees.
- tomp 9y ago> transaction costs in cryptocurrencies tend to be high by financial standards Well if you own the exchange the effective transaction costs are 0.
- dudus 9y agoThere are transaction costs for exchanges but there are also transaction costs for miners. Coinbase I think just lumps these into a single number, but other places you can choose the amount that goes to miners, on the risk of taking longer to confirm your transaction if you pledge a low amount.
- tomp 9y ago> transaction costs for miners So? We're talking about an index by an exchange. I seriously doubt it that they'd actually transact on the blockchain; and if they would, that's just plain stupid, because it only increases costs without any benefit for the investors (who still don't actually own their coins).
- charlesdm 9y agoYou do know there are hedge funds out there charging 2% on AuM + 20% of profit (or higher) to access crypto, right?
- JumpCrisscross 9y ago> there are hedge funds out there charging 2% on AuM + 20% of profit (or higher) For alpha, or the attempted pursuit of it (or a specific risk-return and liquidity profile). The point of index funds is their lower cost.
- zone411 9y agoExactly, the comparison to hedge funds is not valid. Vanguard S&P 500 ETF has an expense ratio of 0.04%.
- JumpCrisscross 9y agoAlso, quarterly redemptions requiring 30 days’ notice [1]. [1] https://am.coinbase.com/#invest https://am.coinbase.com/#invest
- dnautics 9y agowhy is it dishonest to not use a linear scale? When you're investing, you're generally looking for relative-yield-over-timescale, which is appropriately charted as logarithmic.
- pedrocr 9y agoWhen you're investing you usually become suspicious of 300% per year returns. Yet that's what this fund would have returned over the last three years if it had been available since the start of the graph. Using a log scale makes it look sane in comparison.
- DINKDINK 9y agoUsing a linear scale implies that the growth rate is independent of scale. Using a log scale implies that the growth rate is dependent on scale. Depending on your opinion of the market, choose whichever you wish
- dnautics 9y agoIn the modern era of central bank capitalism, the dominant purpose of investment is to fight inflation, which is an annualized quantity, so using a linear scale is nonsensical for the most common practical purposes.
- deleted 9y ago[deleted]
- myroon5 9y agoMaybe more misleading than dishonest, but seems questionable to me in addition to the x-axis being labeled and the y-axis not being labeled
- conanbatt 9y ago2% annual management fee is peanuts for coinbase. Thats not how they are going to make their money on this. Its clearly is about market information. If they were to capture enough funds in the index, they can straight up manipulate the market to choose the coin they want to release: they can charge whatever they want for the next coin release upfront, no cost to them or to the coin seller. It truly is the era of the pump&dumps
- Y7ZCQtNo39 9y agoYikes, that management fee is terrible. Not for me, no siree. (Google how annual fees can drag a portfolio if you are unsure).
- bb88 9y agoYeah.. this is awful especially for a crytocurrency that has no federal oversight.
- grafporno 9y agoEven more dishonest is not using the actual starting date.
- loeg 9y agoI'm not sure it's the scale that's dishonest so much as the implication that the historical results might possibly predict future returns.