Coinbase thinks it can make investing in cryptocurrency even easier. This might sound like a dream come true for cryptocurrency advocates, but there are a few things newbies ought to consider.
Coinbase has announced today that it is adding three new services to its platform: Coinbase Bundles, asset pages, and Coinbase Learn. The aim of these is to help cryptocurrency newcomers get some skin in the game without breaking too much of a sweat.
The former of these additions to the exchange is perhaps the most interesting.
“My first cryptocurrency”
In a Coinbase Bundle, the user is offered the opportunity to invest in a collection of five coins. Think of it like a “my first cryptocurrency” pack. Given that the exchange only offers five coins right now, I’m pretty sure I know what coins will be in that pack.
Coinbase claims that the selection of five coins is “market-weighted.” In an email to Hard Fork, Coinbase clarified that “[t]he bundle allocation percentage is based off the proportional market sizes (market capitalization) of the different currencies (at the time of purchase).”
Put simply, this means that the top five most valuable coins at the time of purchase will be included in the bundle. Coinbase will then automatically invest in those cryptocurrencies (on your behalf), based on what percentage of the market they command.
If more coins are added to Coinbase, the market-weighted bundle will always spread your investment across the top five cryptocurrencies at the time.
Though that isn’t necessarily a good thing. Some research has shown that it is quite common for cryptocurrency prices to track in line with other coins.
Investing in a Coinbase Bundle might be quick and easy, but it doesn’t necessarily spread risk if all coins operate in unison.
Whether new to the game or a seasoned professional, Investors should always research coins and initial coin offerings (ICOs) before parting with any money. This is where Coinbase’s new education tools come into play.
Coinbase asset pages aim to give detailed information about, you guessed it, digital assets.
Indeed, Coinbase is hardly the only company to have launched its own token discovery pages. Tons of exchange services have recently kicked off their own content sections in order to help customers get more familiar (and comfortable) with cryptocurrencies.
While Coinbase Learn tries to lay down some foundations of knowledge for cryptocurrency newcomers. It takes users through everything from what cryptocurrency is, what blockchain is, and highlights a few select coins, such as Bitcoin.
While getting a random selection of coins is unlikely to spark your interest in cryptocurrency, Coinbase is hoping the dedicated learning materials on it’s asset pages, and Coinbase Learn, will help customers make more informed choices.
One thing to keep in mind is that – despite the good intentions behind these new pages – the goal here is to make it easier for customers to feel comfortable about buying and trading cryptocurrency. So you might want to seek beyond the information Coinbase has made available.
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Published September 27, 2018 — 16:00 UTC