Up until now, gaining broad exposure to the crypto market has been extremely limited. But Coinbase is attempting to change that with the Coinbase 50 Index COIN50.
The Coinbase 50 Index (COIN50), launched by Coinbase in November 2024, serves as a benchmark for the crypto market. The index tracks the performance of the top 50 crypto assets listed on the Coinbase Exchange, much like how the S&P 500 represents the stock market.
COIN50 accounts for approximately 80% of the total crypto market cap, making it an outstanding tool for tracking the overall market.
For eligible users outside the U.S., U.K., and Canada, Coinbase offers access to COIN50 perpetual futures contracts (COIN50-PERP), enabling traders to gain exposure to the index with up to 20x leverage.
Index Details & Methodology
Market Cap Weighting: Assets are weighted based on their market capitalization, with a single component’s weighting capped at 50% to prevent over-concentration.
Quarterly Rebalancing: The index is rebalanced every quarter to ensure it reflects current market dynamics accurately.
Eligibility Criteria: Assets must meet fundamental and market eligibility standards, including token economics, blockchain architecture, and security. Stablecoins and privacy coins are excluded.
Composition
As of the latest rebalancing, the top five asset weightings in the index are:
- Bitcoin: 48.60%
- Ethereum: 23.96%
- Solana: 6.16%
- XRP: 5.79%
- Dogecoin: 3.36%
MarketVector Charts and Dashboard
Below is a chart of COIN50 compared to Bitcoin, showcasing the significant correlation and beta that the index exhibits relative to Bitcoin.
MarketVector provides an accessible dashboard for the index, offering sector and token performance metrics along with updates and insights. Below are screenshots of the dashboard.
Tying It All Together
The Coinbase 50 Index offers a streamlined solution for eligible investors seeking broad exposure to the crypto market. Its structured methodology and regular rebalancing provide a transparent and reliable benchmark for assessing market performance.
In our view, this is an excellent way to gain general exposure to the crypto market without the hassle of tracking and managing multiple volatile positions individually. Diversification can be a daunting task for the average retail investor with responsibilities like work and family.
We believe the best way to own this index is to manage it by following our Quantitative Positioning signals for Bitcoin. This approach not only simplifies your exposure to the crypto market but also make risk management more straightforward by reducing the number of positions you need to handle.
The hope is that eventually, Coinbase will be able to offer access to the COIN50 for all investors including those in the United States and other jurisdictions where it is currently unavailable.
DISCLAIMER: This is not a promotion, and we have no affiliation with Coinbase. Members of our team may own or trade any of the assets mentioned in this article.