It will be (as it has already been) a busy year for crypto-investors from around the world, especially with Hedge Project introducing what can be considered as the first official cryptocurrency indices. The crypto indices, which has already gained a lot of attention is based on professional investment-grade rulebooks, like STOXX and the S&P Index suite.
The Rulebook for Crypto 30 Index will be publicly introduced at the Blockchain Solutions Forum in Barcelona and Blockchain for Finance Conference in Dublin this October. The Crypto Traded Indices Series TM was introduced on 24th September 2017 with BC30 (Buchman Crypto 30 Index) as its flagship product.
The concept of crypto indices is still new, with few players working on introducing their own versions. However, the Hedge Project has beat the rest to it with its latest offering whose design is based on the already established solutions, implemented in the context of cryptocurrency markets.
Despite emerging as a leading crypto-investment solution provider, Hedge is not free from challenges. It has to deal with the existing fragmented market microstructure, yet-to-be-established law of one price, and regulatory grey area in which a majority of exchanges are currently operating. Being the first on the scene, Hedge is developing a solution for these challenges. For example, since there are no applicable laws of one price, the platform has designed its crypto-index as secondary indices, drawing inputs from primary price indices of individual currencies. The indices will be rebalanced in real time and recomposed monthly to avoid “fat fingers” trades and resulting flash crashes.
The BC30 index captures over 90% of the total crypto market capitalization, encompassing currencies from various sectors in the market. By capping the constituents’ weight at 20%, a proper diversification across the market will be ensured. The BC30 is designed to be a comprehensive and reliable tool for market participation. To achieve this, a set of well-defined guidelines and an expert index committee to handle the extraordinary unforeseeable future will ensure that the index is built and maintained in a manner that is reliable, predictable and comprehensive for all parties. Next in line are uncapped BC30 MCap which is float-adjusted equal-weighted index.
Hedge project is incorporated in Zug, Switzerland, a Fintech-friendly Industry cluster, for easy access to key resources and networks. Hedge Projects has strategically partnered up with Rialto.ai, a crypto market-maker and arbitrage industry leader, to ensure near instant liquidity and direct, unfettered access to crypto markets. At the moment, Rialto.ai will provide data feed for the calculation of the Hedge Indices.
The Hedge Token Crypto Traded Indices TM will solve the lack of diversity in the crypto markets today by providing a diversified investment portfolio bundled up into a single investment instrument. For the investor, this will reduce the time-consuming, costly and illiquid crypto portfolio.
It is worth noting that the Hedge Project’s BC30 indices are already adopted by Reuters alongside other well-known mainstream market indices like S&P500 and Dow Jones. Other platform’s carrying the BC30 indices include Morningstar and Quandl.