Coinbase Shuts Down Institutional Index Fund While Retail Activity Down 80 Percent

Cryptocurrency services provider Coinbase shut down its index fund service aimed at institutions this week, after reports suggesting a shift-of-focus to its retail users.

At the time of launch, the index fund service was touted as the "S&P 500 index equivalent" of the cryptocurrency world.

Investors failed to adopt into Coinbase's narrative and the fund attracted little interest.

The fund was part of a line of institutional-focused products launched by Coinbase.

The fund provided investors with exposure to the crypto-market via a professionally-managed portfolio of the best-performing cryptocurrencies in a given period.

At the time, Coinbase believed the old adage of index funds beating traditionally-managed funds would be their USP, and attract wealthy investors.

The exchange's high fees and absence of most altcoins meant institutional investors were skeptical before investing in Coinbase fund.

Later, the fund was rebalanced to include altcoins - which typically swing much more than the relatively stable bitcoin - based on their addition to the platform.

The index fund has closed shortly after the announcement of Coinbase Bundle, a mini-index fund aimed at retail investors and amateurs.

While the institutional move failed to attract investors, which eventually led to the exchange focusing on the retail demographic a majority of its $8 billion-valued company was based on, even the latter group is shying away from the company, based on a report by Tribe Capital.