High Hopes For CoinMarketCap’s Cryptocurrency Indices

Cryptocurrency data provider CoinMarketCap announced today that it has teamed up with Solactive, a Germany-based index provider, to create two cryptocurrency benchmark indices. These indices include pricing data covering the top 200 cryptocurrencies by market capitalization. One index will include bitcoin (BTC) while the second index will not. The indices are available from Nasdaq’s Global Index Data Service (GIDS), the Bloomberg Terminal, Thomson Reuters Eikon (Refinitiv), and Germany’s Börse Stuttgart.

The first index is known as CMC Crypto 200 Index (CMC200), which includes BTC. The second, CMC Crypto 200 ex BTC Index (CMC200EX), displays the market’s general performance without the influence of BTC, which currently enjoys a 51 percent dominance of all global trading volume.

The indices are weighted according to market capitalization and are rebalanced quarterly. The index constituent weights are fixed on the selection date, which is five days prior to the rebalancing date. At this time, all eligible cryptocurrencies are ranked by their current market capitalization. This ensures that growing or shrinking cryptocurrencies are accurately represented in the overall index. At any time, if a cryptocurrency is no longer eligible for membership, a replacement is named at the next scheduled rebalancing.

Solactive’s announcement explains that “the rationale behind the ex-BTC version of the index is to display the general market conditions in the crypto-currency space while at the same time avoiding market bias through the market’s focus currency, [which is] Bitcoin…”

Brandon Chez, CEO of CoinMarketCap, said:

“We are excited to launch and share these indices … [which] will promote greater accessibility to cryptocurrency data in an easier-to-digest format. In partnership with Solactive, our chosen index administrator, we hope these professionally-calculated indices will serve to expand the reach of cryptocurrencies into the larger financial markets.”

Barring negative surprises, this unveiling of new indices signals a buoyant future for product innovation tied to cryptocurrency investing.