Features of Top Cryptocurrencies
The Crypto 10 Index, or B10 as it is otherwise known, assesses the performance of the world’s top-10 ranked cryptocurrencies. The assessment is predicated on market capitalisation. As of March 2021, the top 10-ranked cryptocurrencies according to market position included the following:
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Binance Coin (BNB)
- Cardano (ADA)
- Polkadot (DOT)
- XRP (XRP)
- Litecoin (LTC)
- Chainlink (LINK)
- Bitcoin Cash (BCH)
*Be advised that the precise components of the B10 index are subject to change daily, given the extremely volatile nature of cryptocurrency pricing.
Combined, the top 10 dominate the market capitalisation of the cryptocurrency market. For example, BTC alone makes up 60% – 65% of the total market capitalisation of approximately 8684+ cryptocurrencies. When Ethereum, Tether, Binance Coin, Cardano, Polkadot, XRP, Litecoin, Chainlink, and Bitcoin Cash are added, their combined share comprises approximately 80% – 85% of the global market cap. Therefore, it makes sense to gauge overall market performance by way of the Crypto 10 Index which gives special status to the top 10. A possible shortcoming of the index is the distribution by weight. Given that Bitcoin accounts for 60% – 65% of the total market capitalisation, it should have a greater weighting in the B10 index. The weighting of coins and tokens in the BITA10 Index changes according to the composition of the top 10 cryptos in the index. Given the extreme volatility of cryptocurrencies in general, one can expect the B10 index to undergo significant changes from day to day, week to week, or month to month.
The heavy hitters with an outsized market capitalisation such as BTC, ETH, USDT, and BNB can generally be counted upon as ‘staples’ of the B10. However, the bottom performers with lower market capitalisations, and more competitive pricing tend to move in and out of the B10 index, much like lower-ranked teams in professional sports leagues. The index is largely based upon performance. Those cryptos which don’t perform are easily displaced by up-and-coming stars. The extreme volatility of the cryptocurrency market ensures that regular turnover is a feature of the B10. It can safely be said that the bullish or bearish performance of Bitcoin (BTC) naturally has an outsized impact on the overall market capitalisation of the entire cryptocurrency market. Towards the end of 2020 and early 2021, the Bitcoin bull run raised prices and market capitalisations for altcoin across the board. It is worth pointing out that the most capitalised cryptocurrencies aren’t necessarily the most heavily traded cryptocurrencies. This is true for options like Bitcoin, Tether, and Ethereum. The BITA index opening price is released at 00:00 UTC daily. The closing price of the index is released the 23:00 UTC, along with the index value. The weighting for each of the components, along with prices are also provided. This index fund mitigates risk, by diversifying investments across the strongest 10 digital currencies.
Cryptocurrency Index Trading
The Crypto Market Index 10 (B10) 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 B10 was introduced on January 1, 2017 by Bitwise Investments, 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 23,940 points in December 2020, as the cryptocurrency markets went into bull mode during that year. As of late December 2020, the index was sitting right around the 24,000 level.
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 dcx10 chart 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.
In fact, as of December 2020 the cryptocurrency market is on the move again. After breaking above the key psychological level of $20,000 in early December 2020, Bitcoin ushered in a new all-time high, and what appears at the time as an all-new bull market for cryptocurrency markets. By late December 2020 Bitcoin was trading above the $25,000 level, with many market analysts calling for additional significant gains in 2021. It isn’t only Bitcoin that was participating in this rally. Many of the smaller altcoins also experienced significant gains in 2020, with several gaining several hundred percent over the course of the year. Much of these gains were being driven by the entry of institutional investors into the cryptocurrency markets, which ushered in a new era for Bitcoin and the altcoins.
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. Traders might also want to note that the index can be quite volatile as volatility is the nature of cryptocurrency markets, particularly the altcoins. For example, in late 2020 the altcoin Ripple saw its value increase by more than 300% in a span of just six weeks, and by a month later it had fallen to give back roughly 70% of those gains. 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. More recently in 2020 the market is becoming increasingly sensitive to news of large funds and billionaire investors becoming interested in Bitcoin, and putting some capital to work in the markets that just a few years ago they called a sham or worthless. Another trend in 2020 was for publically traded companies to begin shifting some of the assets on their balance sheets to Bitcoin. Understandably the cryptocurrency markets see this as a good direction for Bitcoin and cryptocurrencies in general. 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
- AvaTrade Spreads: 1% over-market
- Minimum Nominal Trade Size: 0.10
- Trading Time: 24/7
Why Trade the Crypto Market Index 10 with AvaTrade?
Trade the Crypto Market Index 10 or any other individual cryptocurrency CFDs at AvaTrade ZA and enjoy the following benefits:
- Regulation –
AvaTrade South Africa is a regulated and award-winning broker, and we are in the process of expanding our regulation even further.
- Intuitive Trading Platforms –
We offer access to a choice of intuitive trading platforms and effective solutions to maximize trading accuracy. These include the highly popular (MetaTrader) MT4 and MT5 trading platforms, the AvaTradeGO app, the DupliTrade social trading system and AvaOptions, AvaTrade’s exclusive Vanilla Options trading app.
- Choice of Assets –
AvaTrade South Africa offers first-class access to a wide range of tradeable assets including cryptocurrencies, forex pairs, commodities, stocks, indices, bonds and EFTs. Our clients can also use automated trading with API Trading, ZuluTrade and DupliTrade. AvaTrade ZA is also one of the few companies to offer Vanilla Options.
- Leverage –
Enjoy leverage of up to on crypto assets.
- No Wallet Required for Cryptos –
With AvaTrade ZA, you do not need a wallet to trade cryptos as you’re trading CFD on the underlying asset which is crypto. Trade your favourite assets from the comfort of one of our trading platforms.
- Safety First –
AvaTrade South Africa is globally regulated via 8 authorities across 5 continents, so your safety is not just assured; it is guaranteed. Our clients’ funds are held in a segregated account, plus with the help of negative balance protection, we protect our clients and ensure a trader’s account will never go below zero.
- Variety of Payment Solutions –
At AvaTrade, we offer a choice of secure deposit methods including credit cards, wire transfer, WebMoney, Dinpay, Boleto and FasaPay. AvaTrade South Africa does not charge any commissions, and there is no margin interest.
- Comprehensive Educational Resources:
You can access our vast collection of informative, educational materials including articles, videos, and articles. Our clients can also access our eBooks and weekly webinars.
- Professional & Responsive Support:
AvaTrade provides multilingual customer service and support for every question you might have.
- Cryptocurrencies are an exciting way to enter the financial markets, and they offer a range of trading opportunities.
Crypto 10 Index Trading Main FAQs
What is the Crypto 10 Index?
The Crypto 10 Index is a market capitalization weighted index of the top 10 cryptocurrencies. Because it is composed of the top ten cryptocurrencies it is widely accepted as a benchmark for the strength or weakness of the broader cryptocurrency market. It was created by Crypto Finance AG and launched on December 31, 2016 with a value of 1,000. As of June 2020 it is managed and calculated by BITA GmbH and has a value around 2,650. Because cryptocurrencies often move up or down in tandem it isn’t unusual for this index to make very strong moves in either direction.
Should I trade the Crypto 10 Index?
Because it is tracking the ten largest cryptocurrencies the Crypto 10 index is an excellent choice for those who want to trade the cryptocurrency markets, but want to try and avoid some of the volatility that comes with trading individual cryptocurrencies. The combination of 10 different assets smoothes out moves in the index somewhat, although it can still be quite volatile in comparison with traditional assets and markets. Traders also appreciate the liquidity found in this index and the diversification it provides.
What is the best strategy for trading the Crypto 10 Index?
There are many different strategies that can be used to trade the Crypto 10, but sometimes the simple strategies are also the best. That’s the case with the Crypto 10. A simple strategy that works well for day trading on the 2-hour charts using a 10-period moving average is as follows: wait for price to rise and either touch or move above the 10-period moving average. The candle should also be a red candle, that is the closing price is lower than the opening price. When these two conditions are met place a limit order 2 points above the highest point of the red candle, with a stop at the bottom of the red candle.