Coinbase wants to create its own crypto index fund, CEO Brian Armstrong said in the firm’s earnings call with investors.

In response to a question about Coinbase’s product roadmap, Armstrong floated the idea, which he dubbed the “Coinbase 500.”

“I think these things could be really beneficial,” Armstrong said on Thursday. “We’d ultimately like to see a path where we could start to get index funds — retail products — in the crypto space.”

He likened a potential Coinbase 500 to the market cap-weighted S&P 500, an index that tracks the stock performance of 500 of the largest companies listed on stock exchanges in the US.

Coinbase is the biggest US-based crypto exchange.

It handled $226 billion of crypto trading volume in the second quarter, down from $312 billion in the previous three months.

While Armstrong’s comments are the first indication Coinbase wants to launch a crypto index fund, the idea isn’t new.

In 2017, asset manager Bitwise launched the Bitwise 10 Crypto Index Fund, a market cap-weighted index of the top 10 biggest crypto assets.

Regulatory hurdles

Armstrong’s index idea comes as US politicians and regulators signal more positive stances towards crypto.

In May, the Securities and Exchange Commission’s snap approval of spot Ethereum exchange-traded products was widely interpreted as a sign of friendlier regulatory policy.

At the Bitcoin 2024 conference in Nashville last month, presidential candidate Donald Trump said he would fire SEC Chair Gary Gensler, to raucous applause.

Gensler is widely perceived as hindering the development of bespoke US crypto regulation, preferring to apply existing securities laws to the asset class.

A source familiar with the matter told DL News that members of Democratic candidate Kamala Harris’s team have reached out to the crypto industry for a “policy reset.”

Armstrong said there’s still work to be done.

He said getting a crypto index approved would require “a different policy environment.”

“I don’t see any path to do it in the near term,” he said. “So we’re going to keep pushing on that one over time with our policy efforts.”

Mixed earnings results

Coinbase beat analysts’ expectations in its second-quarter earnings, reporting $1.4 billion in total revenue.

Still, that’s $200 million less than the $1.6 billion the firm made during the first quarter.

Coinbase Chief Financial Officer Alesia Haas attributed the decline to a 28% drop in spot trading volume driven primarily by lower crypto asset volatility.

The firm’s shares rose about 3% in after-hours trading.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.