Index charts

What is an Index?

An index refers to a statistical measure that tracks the performance of a group of assets or a section of a market. It is essentially a benchmark used to measure and report value changes in representative portfolios.

Traditionally, an index is made up of a selection of stocks, bonds, commodities, or other investment vehicles. The specific criteria for inclusion varies based on the index.

Investors, fund managers, and analysts use indices as benchmarks to compare the performance of individual investments or portfolios against the broader market or sector.

Why create crypto indexes?

Our belief at CrypTools is that the ecosystem as a whole will grow over the course of the next few years. As the capabilities of blockchain networks increase, the amount of individual usecases & industry applications will grow as well.

While this is great from an ecosystem point of view, it will become more and more difficult for new investors to inject liquidity in the market outside of the few main cryptocurrencies, thus slowing down innovation.

For newcomers and even seasoned investors, the crypto market can be overwhelming given the sheer number of tokens and projects. Crypto indexes offer a simplified way to understand market movements without analyzing every individual asset. They provide a standard against which performance can be measured. Fund managers or individual traders can compare their portfolio’s performance against that of a broader market index to determine their strategies’ effectiveness.

Finally, the establishment of well-structured indexes can enhance the credibility of the crypto space, signaling a level of maturation and sophistication comparable to traditional financial markets.

How is an index built?

For now we have dissected the crypto market in 5 different ways:

• Majors & Top Marketcaps

• Blockchains and ecosystems

• Crypto Asset Applications

• Crypto Asset Types

• Stablecoins & Wrapped assets

The current goal is to compartmentalize all projects in either the capitalization they represent within the total market or what their product actually focuses on.

All “indexes” currently are rather asset baskets, that means that all assets are equally weighted. Going forward, we will use automation features which will allow to produce complex & evolving indexes

What is the source of the data?

Currently, Price data used to compute each index are pulled for majors exchanges by the following order if any data exists: Binance, Bybit, OKX, Huobi, GateIO, Mexc. We will add and remove exchanges depending on their data quality and our needs.