Different Types of Crypto Indices
The following are the different types of Crypto Indices including Market Capitalization Weighted Indexes, Price Weighted Indices, Equal Weighted Indices, and Smart-Beta Indices.
- Market Capitalization Weighted Indexes: These are the most common and are calculated based on the market capitalization of the underlying cryptocurrencies.
- Price Weighted Indices: These are calculated based on the price of the underlying cryptocurrencies rather than market capitalization and volume.
- Equal Weighted Indices: They give each cryptocurrency in the index an equal weight.
- Smart-Beta Indices: It use a combination of Market Capitalization Weighted Indexes and Price Weighted Indices and also includes other factors, such as liquidity and volatility, to determine the weight of each cryptocurrency in the index.
What are Crypto Indices?
Crypto indices have become increasingly popular in recent years as a way to track the performance of the cryptocurrency market as a whole or a specific segment of it. These indices are a combination of cryptocurrencies and their prices, which are weighted and adjusted based on different factors.