The Crypto Market Index 10 is an index for the Top 10 cryptocoins or tokens in terms of market capitalisation. Since this index tracks the top blockchain projects, the Crypto Market Index 10 is widely considered the benchmark index for the cryptocurrency market. By simply tracking this index, investors can quickly get a feel of the volatility and sentiment of the overall cryptocurrency market.
The Crypto Market Index 10 was introduced on the 31st of December 2016 by Crypto Finance AG, with the objective to reliably track the performance of the largest and most liquid cryptocoins and tokens as well as to provide an investable benchmark for the cryptocurrency market.
It launched with a standardized baseline value of 1000 points and its value has since mirrored the performance of the overall cryptocurrency market.
The index posted an all-time high of circa 13,600 points in January 2018, before drifting lower that year to a low of circa 2200 in December 2018. It largely moved higher in 2019, posting a high of circa 7800 in July 2019.
Index Composition and Calculation
The Crypto Market Index 10 is measured in points and tracks the prices of the top ten cryptocoins and tokens in the market. Market capitalisation (which is, the token price times number of units in circulation), as well as trading volumes, determine inclusion into the index.
In order to be included in the index, the following conditions must be met:
- A coin or token must have an average market capitalisation of $1 billion over the last 30 days being considered.
- A coin or token must have registered a daily trading turnover of over $5 million over the last 30 days.
In a scenario where less than 10 coins and tokens meet the above criteria, only the qualified assets will be used to compute the Cryptocurrency Index.
Below is a table of the coins and token included in the Crypto Market Index 10 as of August 2019:
|1||Bitcoin (BTC)||$203 billion|
|2||Ethereum (ETH)||$32 billion|
|3||Ripple (XRP)||$16 billion|
|4||Litecoin (LTC)||$7 billion|
|5||Bitcoin Cash (BCH)||$7 billion|
|6||EOS (EOS)||$5 billion|
|7||Binance Coin (BNB)||$4 billion|
|8||Tether (USDT)||$3 billion|
|9||Bitcoin SV (BSV)||$3 billion|
|10||Tron (TRX) $2.3bn||$2.3 billion|
The index computation formula is contained in a Crypto Finance AG white paper. It follows the logical-mathematical principles below:
- Crypto Average Rates – These are the prices of the index components based on the average price feeds of selected crypto exchanges.
- The weight of each asset depends on its price and the number of units it has in circulation.
- There is a variable Divisor that changes depending on the units of an asset in circulation at a given time as well as the asset rank.
- The index is calculated each trading day from 0600hrs to 2155hrs GMT+2 and disseminated to major data vendors in real-time.
The cryptocurrency market is very dynamic and, to reflect any changes that may occur, the Crypto Market Index 10 rebalances quarterly to delete or add eligible assets.
The cut-off date for the index review is on the last trading days of February, May, August and November. In addition, the implementation dates of any resulting changes come into effect on the third Friday of March, June, September and December.
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 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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