From their actual site , the fees are 2% a year so barely better than those hedge funds and absolutely atrocious compared to normal index funds. You are effectively being charged 2% fees for them running some scripts every once in a while to re-balance the fund compared to stock market index funds which charge on average around 0.05%. To make matters even worse, their "index" comprises of only 4 coins! That's hardly an index at all.
Not to mention that coins are highly correlated, so buying some tiny amount of eg. BTC is enough diversification already.
Last time this came up, I shared an algo I made to automatically index across the top 20 coins. Since then I made a hosted version so anyone can use.
It works on top of Binance. Plus you can automatically rebalance daily, weekly or monthly.
I’ll drop a link here if anyone wants to check it out. Right now, it is free.
> We encrypt all user data on our end with cryptographically secure hash functions.
Can you please tell me if you _actually_ encrypt anything? A hashing function is not encryption...
Which is why I mention the continuous month-on-month declines. January trading lower than December is expected. But February lower than January? March than February? April than March? That trend line implies more than just a bubble popping.
The study of bubbles commonly features exchange failures. A bubble popping doesn't make declining volumes any more comfortable for Coinbase.
Actually it does, since it gave them a cushion of $1 billion in revenue that should last a good while.
In contrast to the stock market, where bull markets are long and gradual but bears are short and steep, crypto bull markets tend to be short and steep and the bears long and gradual. This is because crypto market penetration, in the grand scheme of things, is tiny. I've heard it quoted at 1% before. So when there is new news, lots of people crowd in and bump the price up rapidly, and then once the news cycle dies down, they gradually forget about Bitcoin and eventually give up on it.
However, among the speculators are a small minority of people who are actually building things with cryptocurrency. When their projects launch and find an audience, they end up kicking off the next crypto bubble. That's why each bubble has been larger and more broad-based than the previous one, and why they seemingly happen at 2-4 year intervals (2-4 years being the time it takes to build a real product and find customers for it). Coinbase itself was founded in 2012 in the midst of the bear market following the 2011 bubble. Ethereum (which kicked off the ICO craze) was founded in the 2014 bear market following the 2013 bubble. Somewhere among the 1900 ICOs funded in the 2017 bubble will be the seeds of the 2019-2020 bubble, which will likely be the bubble to end all bubbles.
A very similar pattern happened with the dot-com bubble, which people remember today as the period in 2000 where everybody was going public on zero revenues. But people who didn't live through it often forget that there were mini-bubbles before then: there was a run-up in '98 (which, incidentally, is when Paul Graham sold ViaWeb and got the money to fund this site), and there was the initial boom that kicked it off with Netscape's IPO in '95.
And that is ridiculously high returns and a bull market.
The infrastructure needs to be there to 1) support a high amount of buying and selling transactions, and 2) bring money into the system.
This fund will bring money into the system.
1) The bull run of 2017, with the same GDAX platform, even with some technical hiccups.
2) The bear run of 2018, with an "improved" GDAX platform with many more "features".
It's a no-brainer to me.
That's the only way I can think of doing it offline.
Combining the pieces of paper together to generate the key would need to be done via a signing ceremony. I think coinbase have a patent for this.
Even if <pick your favorite> wins, won’t the majority of these coins go to zero in the long run?
That’s a far different proposition than say the S&P 500, where it’s expected that the majority of companies will be worth more 20 years from now than they are today.
For the S&P, the index has performed well for decades, but many of the individual components have not. Roughly half of the constituents have been replaced since 1999: http://www.businessinsider.com/sp-500-index-constituent-turn...
And 87% of the companies present at the inception of the index have left the index: https://www.fool.com/investing/general/2015/11/22/3-things-y...
If you believe that crypto is doomed, buying an index is a bad idea. If you believe that the future is bright, buying an index might be interesting. As you cautioned, implicitly, though, unlike companies, a held coin doesn't actually make nor sell anything. It's more like buying a forex index than a stock market index.
For example; there could be a time in the future where smaller companies decide to go public through a token (i.e. an ICO, but with a company, not a utility token) at a fraction of the cost it currently takes to do an IPO. I'm not talking about scammy pump and dumps, but an actual company with employees, assets and a business model.
Underwriter banks generally 1) sell IPO shares below value to their investors to cause a first day trading pop, meaning less money into the pockets of the company; and 2) take between 3 to 10% of the raised capital as fees for their efforts. On tens, hundreds of millions or billions of dollars.
I could see crypto being a more efficient way of doing that, cutting out the middleman, and where a token represents a share.
He was saying that the cost / overhead difference between ICO and IPO is so large that they either need to make IPO'ing easier or perhaps integrate into crypto in future -- otherwise companies will just ICO instead.
So it could be that crypto helps traditional systems, while reducing costs for both parties.
Legal and other costs should come down a lot as well, as these things will end up being more standardised. You won't need to pay millions in legal fees, perhaps tens or (at most) hundreds of thousands.
In general I think the value in crypto will come from offering liquidity in certain situations by tokenising (perhaps smaller) assets (e.g. make it easy to sell a property ownership share with rental income in a SF office building through some token to an investor in Germany), and generally making a lot of "expensive" things more efficient by cutting out the middleman.
IPO stuff is from 9 mins, but the whole video is crypto related / fairly interesting.
The reason IPOs cost money is because the solutions to problems like the above cost money, and crypto-tokens don't change that simple fact.
You act as if identity and account theft aren't things. A private key sounds a lot better than a 9 digit number with predictabilities and a bit of social engineering.
Also all of the equivalent safeguards against insider trading, self-dealing, and restricted transfer protections would need to be created.
The economic structure of each project varies, however most are designed so that if they are used for the utility they offer then they will have a price > zero.
Due to the fixed number of coins in circulation the value should rise in some relationship with increased adoption & time (time due to deflation)
Probably only a handful of coins will be used for B2C commerce. Notable other utility includes:
> Decentralised storage (currently much cheaper than any company can offer)
> Supply chain tracking
> Website monetisation systems (without needing ads)
> Smart Contracts
> Create your own blockchain (backed by existing decentralisation)
In summary: if it's used then a project should succeed.
Not being tied to gold, the dollar only has value because "we say so".
I could see a world where stock exchanges trade in crypto currency <a> and other cryto currencies are pegged to <a> in some way.
Gold however only has value because we believe it is a store of wealth, and we believe it has value.
Right... and when OPEC says they'll only trade in OilyBoyCoins?
> Gold however only has value because we believe it is a store of wealth, and we believe it has value.
That use to be true but now it's used heavily in various industries like consumer electronics and demand has been pushing the value upward.
This seems to indicate that global demand out paces supply:
If your thesis is 'I think one of these will win, I'm just not sure which one'
and you hope whichever wins, covers the losers
Expecting the final distribution of the coins to follow a Power Law distribution isn't incompatible with the index being profitable.
(the returns of YC are mostly Power Law based, right?)
Volatility increases tracking error; this benefits traders but hurts investors.
Furthermore, AUM is not delta neutral. When an asset goes up its ETF attracts capital; when it goes down the ETF tends to lose capital. Since ETF economics are a measure on assets under management (AUM), ETF sponsors generally want their ETF to go up.
Even the prospectus says "The long term expected value of your ETNs is zero": http://www.ipathetn.com/US/16/en/details.app?instrumentId=25...
"Accredited investor" is defined in Rule 501 of Regulation D . For natural persons, it means someone with more than $1 million in net worth (excluding one's primary residence) or $200,000 in annual income .
> why does this index fund need to only be available to them?
Accredited investors can afford lawyers, to do diligence as well as enforce their claims. They are also better placed to lose money. This combination means people marketing securities exclusively to accredited investors have lower disclosure and other requirements than e.g. someone taking a company public.
Disclaimer: I am not a lawyer. This is not legal advice. Talk to a lawyer if you are seriously considering this question.
The disclaimer has absolutely no legal value, as what creates the attorney-client relationship isn't simply the offering of legal advice, but the offering of legal advice under the color of being in a position of legal authority to do so (i.e., claiming to be a lawyer). Just commenting on a forum post doesn't do that.
But people saw a warning a decade ago and so they keep doing it.
1) Don't solicit publicly (i.e. don't make a business out of convincing non-affiliated retail investors to invest in Bitcoin; you can still band along with friends, family, and fools in a non-scalable fashion)
2) Do solicit publicly, but go through the disclosures-and-compliance process that society has decided should gate scalable access to retail investors' life savings
The cryptocurrency economy is largely unwilling to do #2, which is onerous, expensive, and (ahem) exceedingly difficult to get through if you have produced nothing of economic substance.
Not that I think it would be a great idea for anyone to sink their life savings into Bitcoin right now, but I think the SEC could do their job protecting investors without literally creating a 2-class system of rich privileged people and restricted poor people. For example, they could set limits on the percentage of your income or net worth you could invest in risky opportunities. That would allow people of all income levels to participate.
Bitcoin futures are legal. The principal issue ETF sponsors are running into is constructing an index. The SEC isn't thrilled with indices referencing trades on e.g. Bitfinex.
If we must do this can we just make a rule that all ultra-rich people and only ultra-rich people automatically get 20% more riches a month, or week, or day, and NOT burn the impossibly huge amounts of energy that expanding cryptocurrency will incur? I am not at all sure it's possible to stop capital concentrating this way, but I do think it is peculiarly horrible to have it doing so by a mechanism that intentionally and pointlessly burns energy in an ever-increasing fashion, when we're already in serious trouble through our collective eagerness to burn energy.
To expand on it: there exists an ecosystem of regulated RIAs, which are largely sales agents for investment opportunities who have some advisory and custodial functions. (Most would not describe themselves that way but...)
You can find one in your local office park. They exist at a wide range of firm sizes, but suffice it to say that one value of typical might be "100 clients, $50 million total assets under management, 2 advisors + 3~6 support staff." The prototypical customer is a mid-career dentist or middle-class retiree.
For that firm, some of their clients are accredited investors and some aren't, but the offering to them is, basically, "You've had people tell you in meetings for the last year I-want-to-be-in-on-Bitcoin. You've had to say no, because clearly you have no business doing Bitcoin custody and your lawyer/accountant would have a fit. We would happily let you buy ~$1 million of our basically-runs-itself Bitcoin product, which you'll move $15k here and $50k there to some of your client base. Your business model continues to be charging 1% of assets under management per year. Client need: satisfied. Impact to your firm: minimal. Future asset outflow to cryptocurrency: zero."
Another example is BTC vs BCH. BCH is the original bitcoin code, but BTC is the original Bitcoin community.
I think that's a rather disingenuous if not patently misleading statement.
BCH is factually and unequivocally a fork of bitcoin code and blockchain.
edit: I think you may have a point but I don't see it and you don't make it clear in your comment either. My point is clear and factual and doesn't need your approval.
Maybe the crime was hacking into a computer system? But the perpetrator was using the system's public interfaces exactly as intended. Is it criminal to call a method on a smart contract on a public distributed ledger?
There's no criminal act. The Ethereum community just wants to see themselves as victims instead of accepting that they were hoisted with their own Turing-complete petard.