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Coinbase has launched its own cryptocurrency index called the COIN50, or Coinbase 50.
The fund consists of a diversified pool of 50 cryptocurrencies including Bitcoin, Ethereum, and Solana, which make up over 80% of its value. Other assets include XRP and Dogecoin.
50.3% of the index is weighted by Bitcoin, 27.5% Ethereum, 6.4% Solana, 3.1% XRP, and 1.5% Dogecoin. There are 45 remaining tokens that make up the remaining 11.2%
"We see investor demand for a benchmark that adjusts to lasting shifts in crypto trends and captures a broader representation of the market," David Duong, head of research said.
"One reason why equity index investing has become so popular is that it provides an easy way to gain broad diversified exposure and capture structural shifts in the market trend."
COIN50 is developed in partnership with Coinbase Asset Management and Market Vector Indexes, which previously built the Coinbase Core Index (COINCORE) and Coinbase Size Tilt (COINTILT).
According to Duong, the index is differentiated from other crypto indices which are "heavily concentrated" in crypto infrastructure.
"The Coinbase 50 Index is aspirational, as was the start of the S&P 90 Index in 1923 — before it grew into the S&P 500 in 1957, becoming the global bellwether," he said. "The capitalization of the index, at 80% of the crypto market total, is similar to the share of the S&P 500 Index relative to the overall U.S. market."
Blockhead
COIN50 can be traded through a COIN50 perpetual futures contract (COIN50-PERP) with up to 20x leverage on Coinbase International Exchange for eligible institutional users and Coinbase Advanced for eligible retail users
The COIN50-PERP contract is only available to users in eligible jurisdictions outside the U.S., the U.K. and Canada.
Greg Tusar, head of institutional product at Coinbase, told DL News that the exchange will receive revenue from the purchase and sale of COIN50 and that the fund is a "media play."
He said the firm hopes the crypto industry will refer to COIN50 in similar way media outlets turn to Polymarket odds to determine sentiment about the US Presidential Election.
“There’s an opportunity for us to represent what happened in crypto,” he said. “That creates a branding opportunity.”
Coinbase's stock price has been on a strong rally since Donald Trump's re-election. Over the week, its share price has surged more than 40%.
Last week, Coinbase launched a Bitcoin-backed token on the Solana blockchain in the form of "cbBTC."
Prior to FTX's collapse, the exchange issued "soBTC," a bitcoin-pegged token widely used on Solana. When FTX collapsed, soBTC became unusable and Solana's DeFi system no longer had a reliable, liquid Bitcoin standard.
This hindered Solana-based DeFi protocols and put them at a disadvantage compared to protocols on Ethereum, which offered Bitcoin-backed tokens.
Blockhead
Coinbase is thereby introducing cbBTC to Solana, which allows users to send Bitcoin to Coinbase, receive cbBTC in their Solana wallet, and trade it in Solana's DeFi protocols.
