Crypto Index Tracker – No Differentiation Across Crypto Themes

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Crypto markets have been unable to sustain their rallies from last week. Bitcoin reached highs of around $45,000 last week before falling to lows of around $37,000 as recent as yesterday, currently trading at around $39,000.

Crypto markets appear to be unable to shrug off their correlation to equity markets. Moreover, prospective regulation could be hindering investor flows. Indeed, President Joe Biden is set to sign an executive order on cryptocurrency policy this week.

As for the specific coin performance, we don’t see significant variation across coin types. All of our indices are down between 12% to 16% (see charts one and two). Bitcoin is down least at 12%, while our smart contract index is down the most at 16%. We had expected privacy coins to have gained more traction since the sanctions on the Central Bank of Russia, but their performance has been similar to other coins.

• Smart contract platform index – Fantom (FTM) is down the most at 26%, and VeChain (VET) is down the least at 11%. Ethereum (ETH) is down 14%.
• DeFi index – Thorchain (RUNE) is the only coin in this index to have made gains WoW – it is up seven percent. Meanwhile, Uniswap (UNI) is down the most at 21%.
• Metaverse index – Phantasma (SOUL) is down the most at 23%, and Aavegotchi (GHST) is down the least at four percent.
• Privacy index – Secret (SCRT) is down the most at 22%, and Beam (BEAM) is down the least at six percent.
• Bitcoin index – This is down 12%.

What are in the four indices?

Here are the indices in more detail.

• Bitcoin – The OG of crypto markets deserves its own category and is in many ways the true benchmark for any other crypto market.
• Smart contract platforms – After Bitcoin, the big innovation was to have blockchains that were more programmable. These could host smart contracts or decentralized applications and have allowed the emergence of the metaverse and DeFi. Ethereum (ETH) is the most popular version of a smart contract platform. As well as Ethereum, we also include some key competitors. The constituents of this index are Ethereum (ETH), Cardano (ADA), Avalanche (AVAX), Solana (SOL), Fantom (FTM), VeChain (VET), Terra (LUNA), EOS (EOS) and Chainlink (LINK). We also include Polkadot (DOT), which allows interoperability between blockchains and the use of smart contracts via parachains.
• Metaverse – Coins associated with the creation of a virtual space/digital world on the internet using a combination of augmented reality, virtual reality and social networks. The constituents of this index are Axie Infinity (AXS), The Sandbox (SAND), Decentraland (MANA), Enjin Coin (ENJ), Aavegotchi (GHST), Terra Virtua Kolect (TVK), Ultra (UOS), Phantasma (SOUL), RedFOX Labs (RFOX) and Gala (GALA).
• Decentralized Finance (DeFi) – Financial services built on top of blockchain networks with no central intermediaries. This can be a very broad category, so we narrow this down to platforms that focus on
  lending/borrowing, yield farming, automated market making and decentralized exchange tokens. The constituents of this index are Aave (AAVE), Compound (COMP), Uniswap (UNI), Yearn.finance (YFI), Loopring (LRC), PancakeSwap (CAKE), Maker (MKR), 1inch (1INCH), Thorchain (RUNE) and Terra (LUNA).
• Privacy coins – Coins that obscure transactions on the blockchain in order to maintain the anonymity of its users and their activity. The constituents of this index are Monero (XMR), Zcash (SEC), Dash (DASH), Verge (XVG), Horizen (ZEN), Beam (BEAM), Secret (SCRT), Decred (DCR), Keep Network (KEEP) and Dusk Network (DUSK).

Disclaimer

The commentary contained in the above article does not constitute an offer or a solicitation or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.

Bilal Hafeez is the CEO and editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank and Nomura – where he had various ‘global head’ roles and did FX, rates and cross-markets research.

Featured Image: Shutterstock/Tithi Luadthong/Natalia Siiatovskaia

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