The Crypto10 Index, provided by the company BITA, represents the performance of the 10 largest cryptocurrencies in the market, based on market capitalisation.
By monitoring the top blockchain projects in the industry, the Crypto-10 Index is widely considered as the benchmark index for the cryptocurrency market. By tracking this index, global investors can quickly gauge the volatility and sentiment of the overall cryptocurrency market.
The BITA10 Index was first introduced on the 20th of September 2018, by BITA, a Germany-based Fintech company that is responsible for providing enterprise-grade indexes, data and infrastructure to institutions operating in the investment space.
The Crypto10 Index is calculated in US dollars (USD) and it is calculated daily, with no exceptions. This calculation takes place between 00:00 and 23:00 UTC.
The B10 Index was launched with a standardised baseline value of 5000 points and its value has since mirrored the performance of the overall cryptocurrency market. Ultimately, this index can also be used as a benchmark for a wide variety of financial and non-financial products.
Index Composition and Calculation
To calculate the price of the Cryptocurrency Index, BITA uses data from a variety of sources, including trading platforms, regulatory agencies, token issuers, real-time data from approved 3rd party sources and any related data from service providers. The B10 Index is measured in points and it tracks the prices of the top ten tokens in the market based on trading volumes and market capitalisation, which is, the token price * number of units in circulation.
In order to be included in the cryptocurrency index, the following conditions must be met:
- A coin or token must be traded on at least two exchanges in order to be considered. Tokens traded in multiple exchanges are often accredited with market acceptance.
- A coin or token must have been traded for at least 3 calendar months.
- A coin or token must have, at some point, been in the top 200 tokens by market capitalisation.
Below is a table of the coins and token included in the BITA10 Index as of September 2019:
|#||Cryptocurrency||Distribution by Weight|
|4||Bitcoin Cash (BCH)||11,18%|
The methodology used to calculate the Crypto-10 index occurs as follows:
- Only tokens or coins that are traded exclusively at exchanges, which have passed quantitative and qualitative requirements are taken into consideration and ranked by market capitalisation.
- The top 10 tokens are then selected as the initial components of the BITA10 Index. Composition buffers are used in order to achieve this fixed number of components and this ensures the stability of the index. The end result is that the Crypto index accurately represents the performance of only the largest and most traded tokens in the world.
- The largest positions, based on market capitalisation, are capped at 25%, to ensure greater diversification.
- BITA evaluates changes in rankings at each reconstitution period, taking into account a 30% selection buffer. This means, that any token that falls below the 13th position is removed and replaced by an incoming token. Any token that successfully grows into the first 30% of the ranking, are exempt from the selection buffer and they enter the index automatically.
The cryptocurrency market is very dynamic and to reflect any changes that may occur, BITA provides a wide range of data. At 00:00 UTC daily, the opening price of the BITA10 index is released, while the index settlement values are released daily between 11:50 – 12:00 UTC.
At 23:00 UTC, the closing price of the index is released together with the index value, the composition of the index with weights and prices. The Cryptocurrencies Index also rebalances quarterly so as to delete or add eligible assets.
History of the Cryptocurrency Market
In 2009, there was only one cryptocurrency, Bitcoin, which has stood the test of time and remains the primary gold standard for the overall industry. There are now over 2000 altcoins, but only a dozen have proven to be sustainable projects worth serious investor money.
Decentralisation propped up the idea that cryptocurrencies represent the future of money. This subsequently led to hype and interest beyond the investing public. Adoption and popularity of cryptocurrencies hit a high in 2017 with Bitcoin, the leading cryptocoin, hitting an all-time high of circa $20,000 in December of that year.
But the market always faced regulatory risk, and 2018 was the year serious efforts were made by various government agencies to clip the wings of assets that seemingly had no wings.
On January 2018, major tokens lost more than 40% of their values and were suppressed throughout the year. Yet, regulation was not a curse to the industry entirely.
Firstly, when the market was in its infancy, the headlines were of a blanket ban. So, the shift to regulation meant there was an appreciation of the disruptive potential of the industry and the need to deal with possible negative effects.
Secondly, regulation headlines have also helped generate interest in the cryptocurrency space, attracting more participants and fuelling adoption.
Most regulators now consider crypto assets as legitimate financial assets. Crypto ETFs (exchange-traded funds) have already been launched in major exchanges around the world.
Also, in the US, a previous crypto critic, Bitcoin futures are already trading at the Chicago Board Options Exchange (CBOE). The CBOE has also consistently lobbied the US Securities and Exchange Commission (SEC) to soften its stance on crypto assets. As of August 2019, there are proposals to launch tradable crypto ETFs, with the SEC expected to make a decision before the end of 2019.
Cryptocurrencies have come a long way, and recent headlines will continue to excite investors focused on this space.
Factors Influencing the Overall Price of the Crypto Market Index 10
Due to the composition of the Crypto Market Index 10 and the general nature of the crypto market, various factors may impact its price level.
The crypto market is headline sensitive and will particularly react to big news from regulatory agencies, such as the US’s SEC and China’s CSRC, as well as other relevant headlines, such as hacks on major crypto exchanges.
Other news that may impact the index’s price are mining and trading legislation in different countries.
The cryptocurrency index will also be heavily impacted by significant price shifts of one of its constituent components, especially Bitcoin. As stated above, Bitcoin acts as the gold standard of the cryptocurrency market, and it usually provides the cue for price direction for other coins and tokens.
Why Trade the Crypto Market Index 10?
There are many benefits to trading cryptocurrencies and the Crypto Market Index 10:
- Liquidity – The index is highly liquid due to the amount of activity generated by the individual constituent assets.
- Lower volatility – The main risk of the crypto market is higher than normal volatility. With a crypto index, the volatility is lower, making it more predictable than individual assets.
- Diversification – The Crypto Market Index 10 offers investors a great way to diversify their crypto portfolio without increasing their risk exposure.
- Vast news coverage – By tracking the top 10 crypto assets in the world, the index receives wide coverage and interest among the global investing public.
Crypto Market Index 10 Trading Information
- MT4 Symbol: CRYPTO10
- Typical Spread: 1% over-market
- Minimum Nominal Trade Size: 0.10
- Trading Time: 24/7
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