Cryptocurrency Indices – An Alternative to Crypto Portfolio Diversification

With the increasing demand for cryptocurrencies, investors are looking for opportunities to include traditional investment tools for analysis and forecasting in the cryptosphere. One of the most common decisions are indexes and funds based on them. For example, the Bitwise Asset Management index cryptocurrency fund provided investors with 45% of the income for January and February of this year, while the rest suffered losses.

Stock and cryptocurrency indices

A stock or stock index is a composite index, which is calculated from the prices of a single package of securities; it acts as a marker for investors as a universal vector of development for a particular industry or market. Depending on the method on which the choice of assets is based, the index may show: price dynamics of a group of securities, a particular market sector or the broad stock market as a whole. Stock indices also act as a useful investment tool.

In addition, cryptocurrency indices allow investors to evaluate the state of the cryptocurrency market without a detailed study of each individual cryptocurrency. Cryptocurrency indices are based on market capitalization and are revalued daily, weekly, quarterly. Investors have the opportunity to invest in a portfolio of monetary units recommended by the index, thus saving time and assets: a large player will have enough technical estimates of the index to enter the market, and this will give small investors the opportunity to solve the minimum deposit barrier. Indices are also an excellent substitute for portfolio diversification for any investment.

Cryptocurrency Indices

Bit20

Bit20 is a cryptocurrency index fund that acts as a smartcoin embedded on the Bitshares financial platform. This index includes the 20 most virulent cryptocurrencies by capitalization, except ripple. On the 21st of every month, Bit20 includes an algorithm that recalculates the index, introducing new positions into it and recounting the ratio of existing ones. Today, his rate is $ 735.502.

Camcrypto30

The CAMCrypto30 Index is organized by Tim Enneking’s Crypto Asset Management Cryptocurrency Investment Fund. It is based on the Russell 2000 and FTSE 100 stock indices and is calculated based on the 30 largest cryptocurrencies by market capitalization. The index is recalculated every month to take into account price variations in the crypto asset basket, and their value is calculated again every 5 minutes. For third-party sites, there is a widget on the official web page that displays real-time index information.

CCI30

The CCi30 Index (CryptoCoin Index) was founded in October 2017 by a group of specialists led by Igor Rivin, a professor of mathematics at Temple University and a royal professor of mathematics at the University of St. Andrews; Carlo Chevola – an expert in the field of legal and financial consulting services; as well as Robert Davis, an engineer, IT expert, and programmer.

The index includes 30 cryptocurrencies with the largest market capitalization, and each cryptocurrency has a weight. The components of the index basket are recalculated completely every quarter, while the weight of the cryptocurrencies is recalculated every month. The CCI30 index makes it possible to create a balanced portfolio that maximizes possible profits, while minimizing risks and volatility. Therefore, now this index uses the Cryptos Fund to passively track cryptocurrency quotes.

CRIX

One of the first CRIX cryptocurrency indices (CRyptocurrency IndeX) was introduced in mid-2016 by the University of Management of Singapore, in partnership with the Ladislaus von Bortkevich Department of Statistics at Humboldt University in Berlin, using data from CoinGecko information. CRIX uses a weighted average market system, it includes 20 cryptocurrencies, which are determined by a statistical method according to the volume of market capitalization, and their weight is calculated in real time. A distinctive feature of the index is a serious calculation method, which is open to everyone and has already been used as a topic for dissertations and other scientific studies in economics.

CRYPTO20

CRYPTO20 is the first tokenized hybrid index fund, which includes 20 cryptocurrencies with the largest capitalization, the balance is recalculated every week. This index fund owns its C20 token, which acts as the investor’s share in CRYPTO20. By purchasing a token, investors are simultaneously invested in the cryptocurrencies that are included in the index. The maximum weight of the cryptocurrency in the basket of the CRYPTO20 index is 10%.

DLT10

DLT10 is one of the first cryptocurrency indices created by DLT Financial Group and fintech firm Tramonex from London in September 2016. There are 10 cryptocurrencies with the largest market capitalization in the basket of index: Bitcoin, ether, ripple, stellar, lightcoin, dogikoin, MaidSafeCoin, NameCoin, Factom and NXT. The index calculates balas every week at 17:00 London time. DLT10 provides the desired information value and the ratio between the largest cryptocurrencies.

HOLD 10 Index

On the eve of 2018, Bitwise Asset Management launched HOLD 10, a regulated index fund of 10 cryptocurrencies based on an assessment of their market capitalization. Each cryptocurrency from the basket must be traded on several exchanges, and the volume of trades per month must be higher than 30% of the offer for the last te months, it must have a free exchange rate and not be associated with another asset. The fund monitors and balances the rating of ten cryptocurrencies, which is adjusted, taking into account inflation of market capitalization, forecast charts for the next five years. Revaluation of the list of cryptocurrencies occurs every month. If you believe the published data, for the first two months of operation, the HOLD 10 index brought investors 45% of the profit.

ICEX Top10

The ICEX Top10 index from a group of developers from Russia and the CIS countries was launched at the end of last year. It includes equal parts of the ten largest cryptocurrencies by capitalization and liquidity. Here, the cryptocurrency asset capitalization should be at least $ 500 million, and the average total daily trading volume on all exchanges should be at least $ 10 million over the past week. At the same time, trading on included cryptocurrencies must be conducted at least five different exchanges. Recalculation of the balance of the ICEX Top10 index occurs with each new transaction on the trading floors. In addition, for each element of the basket of the ICEX Top10 index, its own index is calculated.