5 ms·

Couldn't anyone just copy the composition of this fund and buy the same cryptos themselves without paying management fees or being locked in to Coinbase?

paulgb 9y ago
The transaction costs would probably add up to more than 2% depending on how accurately you wanted to track the index, plus it sounds like a bunch of work. (Edit: I'm not saying it's actually worth 2%, which seems excessive)
- tyrust 9y ago
  With a 0% maker and <=0.25% taker fee on GDAX [0], I'd be surprised if you ever came close to paying 2% of your total holdings in fees over the course of a year. [0] - https://www.gdax.com/fees/BTC-USD https://www.gdax.com/fees/BTC-USD
  - hmate9 9y ago
    Taker fee is 0.25%
    - tyrust 9y ago
      Ah yeah, edited to fix, thanks.
- JumpCrisscross 9y ago
  The index they track reabalances annually [1]. [1] https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf 6.10
  - evrydayhustling 9y ago
    And, since those rebalances reflect only relative changes in supply, the turnover should be a small fraction of AUM.
- VLM 9y ago
  You also have the job of figuring out how much you lose by not rebalancing and then figuring out the interval that maximizes total profit (oh and don't forget to include taxes in that calculation)
supermdguy 9y ago
Yes, but it would take a lot of work, and would need to be updated whenever market share for a coin changes.
- deleted 9y ago
  [deleted]
- tyrust 9y ago
  The index currently contains 4 coins. Quarterly (or monthly if you really would like) balancing of 4 assets would not be that difficult.
  - supermdguy 9y ago
    Wow, I didn't realize it was only 4 coins. It'd definitely be much easier and cheaper to do this yourself.
- sk55 9y ago
  Not really a lot of work. They only rebalance annually. https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf Edit: Looks like someone found the same info.
debt 9y ago
No, because that's not how an index works. "The index level for CBI is calculated by dividing the sum of the current USD market capitalizations of all constituent assets by the Divisor and multiplying the result by 100." In particular the reconstitution variable: "CBI will be reconstituted each time that a new asset is listed on GDAX, in order to allocate the correct weight to each constituent asset and to prevent an artificial increase in the index level. Each reconstitution will occur at 5pm Pacific Time on the fifth day that the new asset is traded on GDAX. This is designed to reduce the effect of any temporary price volatility in the new asset in the first few trading days after its listing."

paulgb 9y ago

The transaction costs would probably add up to more than 2% depending on how accurately you wanted to track the index, plus it sounds like a bunch of work. (Edit: I'm not saying it's actually worth 2%, which seems excessive)

tyrust 9y ago
With a 0% maker and <=0.25% taker fee on GDAX [0], I'd be surprised if you ever came close to paying 2% of your total holdings in fees over the course of a year. [0] - https://www.gdax.com/fees/BTC-USD https://www.gdax.com/fees/BTC-USD
- hmate9 9y ago
  Taker fee is 0.25%
  - tyrust 9y ago
    Ah yeah, edited to fix, thanks.
JumpCrisscross 9y ago
The index they track reabalances annually [1]. [1] https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf 6.10
- evrydayhustling 9y ago
  And, since those rebalances reflect only relative changes in supply, the turnover should be a small fraction of AUM.
VLM 9y ago
You also have the job of figuring out how much you lose by not rebalancing and then figuring out the interval that maximizes total profit (oh and don't forget to include taxes in that calculation)

supermdguy 9y ago

Yes, but it would take a lot of work, and would need to be updated whenever market share for a coin changes.

deleted 9y ago
[deleted]
tyrust 9y ago
The index currently contains 4 coins. Quarterly (or monthly if you really would like) balancing of 4 assets would not be that difficult.
- supermdguy 9y ago
  Wow, I didn't realize it was only 4 coins. It'd definitely be much easier and cheaper to do this yourself.
sk55 9y ago
Not really a lot of work. They only rebalance annually. https://am.coinbase.com/documents/cbi-methodology.pdf https://am.coinbase.com/documents/cbi-methodology.pdf Edit: Looks like someone found the same info.

debt 9y ago

No, because that's not how an index works. "The index level for CBI is calculated by dividing the sum of the current USD market capitalizations of all constituent assets by the Divisor and multiplying the result by 100." In particular the reconstitution variable: "CBI will be reconstituted each time that a new asset is listed on GDAX, in order to allocate the correct weight to each constituent asset and to prevent an artificial increase in the index level. Each reconstitution will occur at 5pm Pacific Time on the fifth day that the new asset is traded on GDAX. This is designed to reduce the effect of any temporary price volatility in the new asset in the first few trading days after its listing."