New COIN50 index brings stock market tools to crypto
Coinbase simplifies trading and investing with S&P 500-style platform
In a move that brings cryptocurrency closer to everyday investing, Coinbase is introducing its new Coinbase 50 (COIN50) index—think of it as a temperature check for the entire crypto market.
Just as the S&P 500 helps people track the stock market, COIN50 will allow traders and investors to monitor wider market trends and get a better picture of the general crypto economy. As Coinbase states, "crypto is now ready for the same."
In an X thread, Coinbase shared that COIN50 works as a "benchmark representing the top 50 eligible digital assets, all in one easy-to-follow index." These assets must all meet certain standards to be included in the index.
A benchmark representing the top 50 eligible digital assets, all in one easy-to-follow index. pic.twitter.com/uG6QAVdb76
— Coinbase 🛡️ (@coinbase) November 12, 2024
According to Coinbase, the company is in a position to provide an index that can offer global investors reliable and transparent crypto market exposure.
COIN50 is weighted according to market cap (the total value of each cryptocurrency) and designed to undergo quarterly rebalancing (updating which cryptocurrencies are included). It also covers roughly 80% of the total crypto market cap.
With this, investors and traders may capitalize on COIN50 for monitoring performance of the wider market and benchmarking their own returns.
The methodology behind the index is grounded on the impressive three-year record of Core Coinbase Indices. Under this approach, every asset undergoes assessment based on blockchain architecture (the underlying technology), tokenomics (how the cryptocurrency is managed and distributed), and security.
Not to mention, all assets included in COIN50 are accessible and listed in Coinbase Exchange.
Greg Tusar, the Vice President, Institutional Product at Coinbase, told Fortune "what we're trying to do is establish a benchmark that is not specific to any asset", giving a broad basket of crypto assets.
The new platform, according to Tusar, can be used to gauge the performance of markets, similar to how stock market traders use the S&P 500 index to evaluate leading companies in the US.
As more onlookers and investors acknowledge crypto's value in the long run, the demand to have enhanced exposure to the asset class will grow.
With the increasing maturity of the crypto economy, Coinbase aims to release a broader index and to align with the market's growing diversity and size. This innovative move matches Coinbase's general commitment to innovation and meeting evolving needs in a landscape that sees rapid change.
