Wave Financial Launches Select 20 Index To Track Performance of Cryptocurrency Asset Class


CommPRO.biz Editorial Staff

Los Angeles-based Wave Financial Group announced it has formally launched an algorithmic, rules-based index which tracks nearly all of the cryptocurrency market. The Wave Select 20 Index provides exposure to the top 20 crypto currencies weighted by market capitalization, excluding privacy tokens and stablecoin, and rebalances monthly.

The index currently captures over 93% of the total cryptocurrency market capitalization, and aims to provide superior pure beta (market) exposure. The index’s largest components include current market leaders, such as Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). Its smallest holdings include a number of fringe currencies, such as Basic Attention Token (BAT) and NEM (XEM). The index is constructed to be tradable.

“Even as sophisticated and institutional investors increasingly diversify their holdings to include digital assets, there are few complete ways to effectively track the cryptocurrency market,” said David Siemer, CEO of Wave Financial. “We designed the index to reflect not only the performance of leaders such as Bitcoin, but also emerging assets which offer positive upside as their adoption increases. Through monthly rebalancing, the index simplifies tracking the health of the cryptocurrency asset class and can adapt to rapid shifts in the marketplace.”

The index was designed using a rigorous framework to reduce turnover and risk, and Wave monitors the index holdings monthly to ensure it includes the largest crypto assets by market capitalization. Select 20 excludes stablecoins pegged to fiat currencies, as they do not move with the market. The index also excludes privacy coins to avoid exposure to regulatory issues in certain countries.

Given the evolving nature of digital assets and decisions made by blockchain project leaders, Select 20 also accounts for the future possibility of forking and airdrops of index components. In the event that a fork occurs to a cryptocurrency, the value of the fork will be included in the index as an additional token until the next rebalancing date, when it can be rebalanced out of the index. If the value of the token is less than 15% of the value of the main chain, uncertain or cannot be determined, it will be calculated at zero value.

In the event that an airdrop occurs, the newly airdropped tokens will generally not be included in the index. Using an inception date of February 1, 2019, and a base value of $100, the index has risen 48.17% as of May 1, 2019.

Source: Blockchain Wire