Bitcoin and other cryptocurrencies are moving further into the financial mainstream, with news breaking after the start of the new year that Belpointe, a wealth management company in Greenwich, CT, and Chance River, a consultancy based in Stamford, CT, have launched the Belpointe Crypto Index.
The companies say this new cryptocurrency benchmark will index a diverse basket of cryptocurrencies. “The index will include and weight cryptocurrencies based on their market capitalization, trading volume, quality of blockchain” as well as additional, unspecified factors, they said.
Further, the Belpointe Crypto Index is intended to standardize measurement of the cryptocurrency markets and provide a benchmark for investment managers overseeing portfolios of cryptocurrencies.
“We’re seeing strong adoption of cryptocurrencies worldwide, fueled in part by a rising mistrust of fiat currency,” said Nithin Eapen, who created the benchmark. “People are recognizing that we can transfer value over the wire without a trusted third-party in the middle, which causes friction.”
Eapen conceded it is “absolutely impossible” to pick the future winners in this space. “But, we know this space is expanding, and the ability to invest in an index could be the best way to capture optimized returns,” he added.
While so much attention has focused on how Bitcoin provided a 15-fold return in 2017, other crypto coins grew from $1 billion in market capitalization to a $300 billion market cap last year. “There is clear opportunity to educate the wider audience of portfolio managers, financial advisors and investing public about the crypto space,” said Eapen.
Given the recent emergence of Bitcoin futures, the development of such an index was inevitable, as was the launching of the world’s first cryptocurrency index fund. In October 2017, Bitwise Asset Management rolled out the Bitwise HOLD 10 Private Index Fund, which holds the top 10 cryptocurrencies weighted by market cap.