Super app CryptoWire recently released the first cryptocurrency index of India the IC15 Index, which will determine the performance of the 15 most traded digital currencies that are listed on leading digital currency exchanges by market capitalization. Let us see an explanation of the significance and working of this system.
How Is IC15 Index Created?
CryptoWire created an Index Committee of crypto experts, academicians, and industry practitioners that will select digital currencies from the best 400 coins with respect to the market cap. The eligible crypto should have traded on at least 90 percent of the days during the period of review and be among the 100 most liquid digital currencies in terms of the value of trading. Also, the digital currency should be in the top 50 in respect to the circulating market capitalization and also the cryptocurrency price in India INR. The committee will then choose the top 15 digital currencies. The index will be reviewed on a quarterly basis.
What Is The Significance Of The IC15 Index?
As per the formulators, IC15 can be duplicated for creating index-linked items like exchange-traded funds (ETFs) or index funds. Usually, the presentation of a mutual fund scheme is determined with reference to a benchmark, which could be a final return index of the Sensex or the Nifty. IC15 Index chart is the first index in this country that can act as a standard of the underlying digital currency space and the performance standard for fund managers. Moreover, robo-advisors, which offer financial advice with minimal human interference, can use this index to formulate investment products at lower costs.
How Does IC15 Index Associated With Other Market Indicators?
The base IC15 index price as of 1 April 2018 was 10,000, implying the index has increased 615% in absolute terms to 71,475.48 as of 31 December 2021 which is the ICP highest price in INR. IC15 has increased 138% in 2021 in comparison with a 24% return by the Nifty 50, 27% by the S&P 500, and -3% by gold. The index has a low association with other asset sectors which are gains in IC15 that would not mirror gains in other asset classes. The ICP highest price in INR is 2,253.00 INR.
Does Can index-Based Crypto Investing Reduce Risks?
Index investing can be a great way to broaden against risks as a fund invests in a group of assets against several limited coins. However, index-based investing may not completely remove risks that are associated with investing in crypto assets. Case in point: IC15 witnessed a 50% dive in 2018, whereas other asset classes have witnessed a maximum decrease in the range of 3-4%. Further, BTC and ETH have a mixed weightage of 77% in the index, making it highly vulnerable to any fluctuations in these two coins.
Can Crypto Funds Be Launched In India?
SEBI (Securities and Exchange Board of India) chairman Ajay Tyagi lately asked mutual fund houses not to release any crypto-based funds until the Centre arrives with clear regulations. This implies that asset management entities for now will not be able to release crypto funds that are based on IC15. However, in the lack of any regulations, crypto platforms can provide products that are based on the index. Global crypto investment platform Mudrex in the previous year launched Coin Sets which is a crypto fund that is based on themes such as DeFi (decentralized finance) or market capitalization.
The primary aim of the IC15 index is to offer complete insights into index-linked items like crypto ETFs and also funds. It will also offer data about crypto mining and the complete digital currency market. It will also help investors to understand important details about the crypto ecosystem and also offer solutions for varied investments in cryptos.
It will not only allow crypto investors with a guide but also investment managers and enthusiasts, given the notion that it is a basic crypto market tracking index that will offer a complete reflection of global markets.