How Does Ic15, India’S First Cryptocurrency Index, Work? How Will It Help Investors?

The cryptocurrency market is growing rapidly in the country. Reports suggest that nearly 8 percent of Indians now own crypto. According to a November 2021 report by crypto and intelligence research firm CREBACO, India’s investment in cryptocurrency has ballooned to more than $10 billion from $923 million in April 2020.

After a huge rally in 2021, the cryptocurrency has entered a correction phase. The impending crypto regulation bill and the Reserve Bank of India’s warnings against the use of cryptocurrencies have also kept cryptocurrencies under pressure. The cryptocurrency market is more volatile than the stock markets and can be risky for investors, especially retail investors who invest without proper knowledge. While some popular platforms such as WazirX and CoinSwitch Kuber have so far been facilitating cryptocurrency trading, there has been no dedicated index of cryptocurrencies in the country yet.

CryptoWire, TickerPlant’s premium encryption app, now wants to bridge the gap. Launched India’s first crypto index – IC15. According to Jigish Sonagara, Managing Director and CEO, “CryptoWire is in a position to emerge as an industry partner to disseminate knowledge, research and information, and help participants make informed decisions.”

Read on to find out what this indicator is all about and what it means for cryptocurrency investors in the country.

How does the IC15 indicator work?

IC15 will feature the 15 most traded cryptocurrencies listed on the leading crypto exchanges worldwide by market capitalization. The index is similar to the Nifty 50 which includes the top 50 players in capital markets across sectors.

How will the IC15 index help investors?

The goal of IC15 is to provide investors with insights into index-related products such as crypto funds and exchange-traded funds (ETFs). A crypto ETF tracks the performance of the individual or multiple digital tokens that make up the fund. Depending on the buying and selling activity, the price of crypto ETFs also fluctuates. Just like stocks, crypto ETFs are also traded daily.

Moreover, the indicator will also provide information about crypto mining and the performance of the broader crypto market. While its purpose will remain to educate, it will open up diversification options for investors who want to get involved with blockchain and other crypto tokens.

IC15 could eventually become a benchmark for fund managers to measure the performance of the underlying cryptocurrency and related products and be representative of market sentiment.

Who will decide the 15 cryptocurrencies covered by the IC15 index?

The IC15 Index will be managed by an Index Governance Committee formed by CryptoWire which will be made up of crypto experts, eminent academics and industry experts. The committee will select 15 cryptocurrencies from among the top 400 cryptocurrencies by market cap.

What cryptocurrencies will IC15 cover?

To qualify for a position on the list, cryptocurrency:

  • It must be traded within 90 percent of the prescribed review period
  • It should be among the top 100 most liquid cryptocurrencies in the world by turnover
  • Should be among the top 50 cryptocurrencies in the world by popularizing market cap
  • How will the index value be calculated?

    This is a pre-weighted indicator, which means that each cryptocurrency will be given a weight proportional to its price per token. In the case of IC15, the weights are as follows:

  • Bitcoin – 51.57
  • Ethereum – 25.79.2007
  • Binance Coin – 5.03
  • Other alt coins – rest no more than 5 . each
  • On the base date, the divisor will be calculated using the total market capitalization of all the participants in the index. The indicator undergoes normalization during each rebalancing period, during which it is multiplied by a certain normalization factor.

    The base value of IC15 is 10,000, and the base date will be taken as April 1, 2018. This means that as of December 31, 2021, the index had an absolute gain of 615 percent to 71,475.18.

    The indicator will be constantly monitored and audited to be reviewed and rebalanced on a quarterly basis. The revision deadline has already been set on the 15th day of the calendar in the months of March, June, September and December.

    (Edited by: yashi gupta)