As of today, two new cryptocurrency indices go live on the Nasdaq Global Index Data Service (GIDS) platforms, Bloomberg Terminal, Thomson Reuters Eikon and the Borse Stuttgart in Germany. The platforms represent a vast spectrum of major financial trading platforms worldwide and promise to expose the cryptocurrency market to a massive new user base.
The two indices, CMC Crypto 200 (CMC200) and CMC Crypto 200 ex BTC (CMC200EX), cover 200 cryptocurrencies and are provided by CoinMarketCap – currently the leading provider of cryptocurrency market data.
The CMC Crypto 200 ex BTC Index offers an insight into market data excluding Bitcoin, which accounts for over 50 percent of market data and as a result skews perceived performance of smaller altcoins. Providing an index that separates the market in this way provides better insight for traders into the broader market impact of cryptocurrencies.
CoinMarketCap claims the indices offer the most comprehensive coverage of digital assets, although the platform has been criticized in the past for not properly accounting for inflated volume. In December last year, a report from the Blockchain Transparency Institute (BTI) claimed that as much as 80 percent of cryptocurrency exchanges exhibited inflated volume due to wash trading and ‘bot’ activity.
It has been alleged that exchanges do this in order to attract higher listing fees by appearing to benefit from far larger trading activity than what genuinely exists. The report singled out some of the world’s largest exchanges, including OKEx, Huobi, and Bithumb, as the main offenders. Several other cryptocurrency market data providers, such as CoinLib.io, offer data that is adjusted for market manipulation – however, it has not been ascertained exactly how accurate these adjustments are.
CoinMarketCap launched the indices in collaboration with German financial services provider Solactive, who will assist in re-balancing the instruments and developing new custom indices for clients. Speaking of the launch, CoinMarketCap CEO Brandon Chez says the indices will “promote greater accessibility to cryptocurrency data in an easier-to-digest format.”
The news comes at a tumultuous time for institutional adoption of cryptocurrencies. Recently, the Chicago Board Options Exchange (CBOE) Futures Exchange announced it will stop offering contracts for its Bitcoin futures (XBT) instrument due to lack of demand in US markets. However, CBOE’s main competitor, the CME Group, have chosen to keep offering its version of Bitcoin futures.
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