CoinDesk Introduces Broad-Market, Digital Asset Index
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Jodie Gunzberg, managing director for CoinDesk Indices, stated that the CoinDesk Market Index (CMI) consists of 148 digital currencies. Each token must have a price history from at least two qualified exchanges that date back at least 30 days to qualify for consideration.
The new index joins a crowded market of competitors looking to satisfy investor and trader demand for metrics to assess the success of the cryptocurrency market.
Investors and traders use price indices to determine whether they outperform the market. Investment funds based on indexes created by asset management organizations have grown into enormous businesses, providing exchange-traded stock funds based on the S&P 500, Nasdaq Composite, and other indexes, including those for bond and commodity prices.
CoinDesk's Bitcoin Price Index
The new index from CoinDesk expands on the initial success of the one that the media company established after purchasing the data and trading platform TradeBlock in 2021.
Along with advertising, sponsorship sales, and cryptocurrency conferences, specifically the flagship consensus brand, CoinDesk management believes that license fees from the expanding index business will become a significant source of income.
Taxonomy Of Cryptocurrencies
About 500 of the most significant digital assets are divided into six categories by the DACS (Digital Asset Classification Standard): money, smart-contract platform, DeFi (decentralized finance), culture & entertainment, computing, and digitalization.
Due to the market capitalization-based weighting of the CMI index, the two largest cryptocurrencies, Bitcoin (BTC) and Ether (ETH) are initially significantly weighted in their favor. On the second working day of each month, the index will be rebalanced, and more assets than the original 148 are anticipated, according to Gunzberg.