A team of prizewinning mathematics PhDs, quantitative analysts and traders, led by Igor Rivin, Professor of Mathematics at Temple University, and Carlo Scevola, economist and investor, director of Hermes Asset Management, have launched the Crypto Currency Index (CCI30), a new benchmark for cryptocurrencies.
Comprised of the 30 crypto currencies with the biggest market capitalisation, the CCI30 is the first index of its kind to track the booming crypto currency marketplace. Its constituent currencies represent 93 per cent of the world’s total crypto currencies market cap.
“Keynesian economic policies have eroded the public’s faith in ‘fiat money’ such as dollars and euros,” says Scevola, who runs a financial advisory firm. “Crypto currencies are filling a void, and our index will help investors gain insights into this exploding marketplace.
“This is the first crypto currencies index that can be used as an actual investment tool, not just an academic curiosity or a marketing gimmick. Despite our strong theoretical background, we didn’t forget that we are first of all investors and traders, and as such we wanted and needed an index that has a practical use. It is set to be the benchmark for this sector, and it will be widely adopted by investment funds and ETFs.”
The influx of traders moving into crypto currencies has contributed to an eightfold rise in valuations since the beginning of 2017. Concerned that stocks prices may have plateaued, investors increasingly are plowing money into crypto currencies, a largely untapped market that until recently has been the realm of professional traders.
While Bitcoin is the best known crypto currency, many others have come online. Crypto currencies now have a combined market capitalisation of around USD150 billion at the time of this writing. According to a report on CNBC, the daily trading volume of these crypto currencies could surpass that of Apple (more than USD6 billion) in the near future.
“Crypto currency market caps can be quite volatile,” says Professor Rivin, an award-winning mathematician and theoretical economist. “Thus the ‘top 30’ have to be computed much more frequently than, say, the constituents of the FTSE 100.”
Given the volatility of the space, the CCI30 performs a full computation of its constituents every quarter, and reweighs the constituents monthly. In addition, rather than compute the top thirty crypto currencies based on a single day’s market cap, the CCI30 will smooth its data by using a weighted average of the past month.