Todd R. Kornfeld, of counsel in the Financial Services Practice Group of Pepper Hamilton, was quoted in the March 6, 2018 TheStreet article, "Coinbase Launches Index Fund to Give Investors Broad Crypto Exposure."
Todd Kornfeld, attorney in the Financial Services Practice Group at Pepper Hamilton LLP, said index funds could be an attractive choice for investors looking for a more traditional investment vehicle. A lot of investors looking to gain cryptocurrency exposure might not feel comfortable with the security, custodies and nuances of digital wallets, but a holding in an index fund is more similar to traditional securities.
"There are a lot of mechanical and practical things you have to consider when you buy a cryptocurrency," Kornfeld said. Buying into an index fund could mitigate some of those new-age concerns, provided the issuer is compliant with regulations.
Kornfeld noted that so long as the index fund issuer is following regulatory standards, their index fund makes the lives of smaller investors easier. Plus, an index fund allows those investors more exposure and breadth.
"That's why people like S&P index funds," Kornfeld explained. They allow a wide swath of exposure, allocating funds to a number of equities instead of piling into one single stock. The same could be said for a cryptocurrency index fund -- investors can gain exposure to numerous digital assets without being beholden to the price moves of a single coin or token.