Constituents

About CoIndex.Online

Index with Top Cryptocurrencies by Industries

There are hundreds of cryptocurrencies and tokens, with various purposes, and this can be often confusing for the average investor. For simplicity and convenience, we have set up nine categories, based on the main purpose or application of the token. We named them CryptoIndustry indices.

To the right you can see the real-time price charts for the top 5 constituents by market cap in the past 1 month, 24 hours or live. The rankings of the constituents are constantly updated and can change, depending on the market cap and the other factors and variables we are using in the formula.

Similarly to the CryptoIndustry indices, we have set up a Cryptocoin Index that includes the largest coins by market cap. We rank the Top 5, 10, 15 and 30 and they include the respective number of cryptocurrencies. Once again, the data is updated regularly, factoring in the market cap and the other variables used in our computation formula listed below.

 

How do we compute the Crypto Currency Indices?

Since digital currencies are quite volatile in terms of market cap, the cryptocurrency and cryptocoin indices need to be re-calculated much more often than the constituents of stock market indices like S&P 500 or Dow Jones Industrial Average.

The index components undergo a full computation every quarter, while being reweighted each month. Due to the high volatility of the cryptocurrency space, it is unreasonable to calculate the top 30 coins on a specific day (ex. the last day of each quarter). We refine our data by means of an exponentially weighted moving average of the market cap.

How is the constituents weight calculated?

The weight the constituents of the Top 30 CryptoCoin index is based on their market capitalization, which is reasonable to a certain extent for the mature stock market (only to a certain extent, because the top 52 in S&P 500 account for 50% of the overall weight). In the cryptocurrency segment though, the situation is much harsher, as one single component, namely Bitcoin, accounts for around 35% of the total market capitalization.

A proportionally-weighted index is therefore not entirely useful, so in our strategy, the weight of each constituent is proportional to the square root of its market cap.

 

How do we compute the index?

We define the index value between rebalancing dates using the following formula:

indices-formula

It represents the index value at time t, while Wj is the weight of the jth name in the index and Pj represents the price of the jth name as a function of time. On days of rebalance, the weights are normalized, as the value of the index stays the same, no matter if it is calculated with new or old weights. We do a real-time calculation of the index. All values concern the close of the day before, at 00:00 GMT.

The Results

It is not odd that the index is a much better investment vehicle than Bitcoin. We have compared the Top 30 CryptoCoin index with the Bitcoin performance since the start of 2015 and we found that as of January 2018, Bitcoin was up by a factor of 42 with much volatility, while Top 30 CryptoCoin had risen by a factor of 154. The Top 30 CryptoCoin’s increase reflects the fact that other cryptocurrencies had performed much better than Bitcoin, with a higher Sharpe ratio. This shows that when investing in the index, one can profit from the unforeseeable increase of some coins, while the drop of others will incur only limited losses.

The Top 30 Crypto Coin Index is the most precise tool to measure the entire crypto market. It is an industry standard for virtual currencies because it can be used as a unique tool for investors, traders and asset managers as well as replicable index for passive funds and ETFs.

 

Statistics

  • $ bn total cap
  • $ bn 24hr trading volume
  • % of all market cap