Small history of cryptocurrency indices

The idea of having crypto or bitcoin indices has existed in the cryptocurrency world for quite sometime now. The number of crypto assets available for investors to put their money in has grown over the past few years and tracking all of them in different exchanges can be a tiring situation. There are a lot of statistics involved which requires one to dedicate a lot of time thereby inconveniencing investors. The traditional exchange markets have been using indices and it has worked for investors in these markets. They can easily know how the market they have interested in is fairing on just from the performance of the index where the top stocks are listed. It also gives a broader perspective of what goes on in exchanges. Fluctuations during a trading period may discourage investors from ploughing their money into these assets. Having an index would give the true position of the listed stocks thereby giving investors better information regarding the market.

Performance of Huobi 10

Any cryptocurrency exchange platform can launch their own index and give enormous claims about its capability however, this needs to be backed up by facts. When compared to Bitcoin, the Huobi 10 had an outstanding performance. Data collected between March 2018 to May of the same year, the Huobi 10 alpha had a score of 0.0028 compared to Bitcoin. Its better compared to BTC recorded a score of 0.79. These scores simply show that the Huobi 10 index has the capability to maintain alpha and restrain volatility which is important as the cryptoassets markets are arguably the most volatile markets of this century.

What Huobi 10 means for investors

Opportunities. The efficiency that will result from Huobi 10 will reduce the amount of resources required to monitor different assets thereby providing resources for further investments in the cryptoassets markets. Promoting cryptocurrency investments may also be achieved through Huobi 10. Institutional investor confidence in cryptocurrency is being exercised with caution, for now. The establishment and success of indices such as Huobi 10 could help show investors that the cryptocurrency and cryptoassets market is growing and evolving to a more mature platform than it was when it started.

What about delisted assets?

Huobi has a concrete plan for keeping the index running even when delisting of a cryptoassets occurs unexpectedly. When a delisting occurs, the sample is replaced temporarily. Its replacement comes from the top most ranked coin in the candidate list. This would help keep things running.

More indices to come in future? More big moves?

There are plans to roll out more indices in the future. Investors would therefore have a deeper view of the Huobi exchange platform as these indices would represent different categories of cryptoassets.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store