Bitcoin exchange Coinbase launches the 'Dow' of cryptocurrencies

Coinbase is launching a weighted index fund for cryptocurrencies.
Much like how the Dow Jones Industrial Average gives a sense of the American economy, this fund tries to reflect major trends in the cryptocurrency market.
"It's an easy way to get exposure to the crypto assets that we offer on our exchange," says Coinbas President and COO Asiff Hirji.

Popular online exchange Coinbase is releasing a weighted index fund for cryptocurrencies.

"It's a very simple to use, easy way to get exposure to the crypto-assets that we offer on our exchange," Coinbase President and COO Asiff Hirji told CNBC's "Fast Money" Tuesday.

The Coinbase Index Fund will give accredited U.S. investors exposure to all assets listed on the company's current exchange, GDAX. The currencies will be weighted based on market capitalization.
Much like how the Dow Jones Industrial Average is a basket of 30 stocks meant to give a sense of the American economy, this fund will try to reflect major trends in the cryptocurrency market.

Coinbase is the leading U.S. marketplace for buying major cryptocurrencies. Its GDAX exchange for professional traders offers bitcoin, bitcoin cash, litecoin and ethereum . It does not currently offer ripple, or XRP.

The company has been cautious when adding new currencies to the exchange, and is working to avoid any "rubbish out there", Hirji said. But whenever a new coin is listed, Coinbase told CNBC it will automatically be added to the fund.

"There has been a lot of discomfort from the SEC around a lot of these ICO-based tokens," Hirji said. "We're not going to be the ones operating in the black."

Only U.S. residents are legally allowed to invest at this stage, Hirji said, citing SEC oversight as a key reason.

Grayscale bitcoin also launched new crypto investing products Tuesday. The company added four new funds that each hold positions in a single cryptocurrency.

Like Coinbase's product, Grayscale's new trusts will be offered to accredited investors with a minimum $10,000 investment. But unlike Coinbase, Grayscale has a one-year vesting period.

Hirji pointed to Coinbases's broader approach, which he said is more tailored to individual investors.

"I think the investors are not going to want to pick specific winners or losers," Hirji said.