08 Feb INDIA’S FIRST CRYPTOCURRENCY INDEX
INDIA’S FIRST CRYPTOCURRENCY INDEX- Today Current Affairs
India has the bombay stock exchange and the national stock exchange for equities,but now india have own crypto index, which will monitor the performance of the 15 most traded crypto currencies that are listed on crypto exchanges globally.The IC15 index launched by global crypto super app,will serve as a benchmark on digital markets that will a diversified representation across the increasingly varied crypto currencies market places.
Today Current Affairs
What is the crypto currency index? The Hindu Analysis
The crypto currency index known as IC15 has been launched by the global crypto currency super app kryptowire.
- It is a rule based broad market index by market capitalisation,which tracks the performance of top15 widely traded liquid crypto currencies,in terms of market capitalization.
- The index includes a governance committee.
- It comprises leading domain experts,academicians and industry practitioners.
- These experts will monitor and administer the rebalancing of top15 cryptos every quarter.
- The base date is 1 April,2018 while the base value of the index is set at 10000.
- This index captures over 80% of market movement.
How is IC15 Constructed? The Hindu Analysis
The index will select cryptocurrencies from the top coins based on market capitalisation.The eligible cryptocurrency should have traded on at least 90% of the days during the review period and be among the 100 most liquid cryptocurrencies in terms of trading value.
The crypto currency should be in the top 50 in terms of the circulating market capitalisation too.
What is the main objective behind the index? The Hindu Analysis
- The index enables crypto enthusiasts, investor’s and investment managers to monitor the performance of crypto currencies in the global markets.
- IC15 is the first index in index that can act as a benchmark of the cryptocurrency market and the performance benchmark for fund manager’s for creating index linked products like index funds,ETFs etc.
OBJECTIVE – Today Current Affairs
- Insights of crypto mining the true benchmark and mirror of the underlying crypto market.
- Presenting an easy solution to follow for having a diversified portfolio.
- Acting as a performance benchmark for fund managers.
- Uniquely positioning the index for efficient derivatives trading in the cryptocurrency trading marketplace.
How does India benefit from a crypto index? The Hindu Analysis
- Index based investing leads to diversification which is better than investing in individual tokens.
- A crypto index would track some of the top cryptocurrencies by market cap and hence eliminate the random tokens with no fundamental value or viable use case.
- Indian investors are traditionally more risk averse compared to our western counterparts.
- A crypto index would be an ideal benchmark for Indian investors dwelling in the cryptocurrency market.
Creating a balanced cryptocurrency index in India would serve as the foundation for different types of financial products such as crypto ETFs and funds. This will help provide a benchmark standard for fund managers.