5 key points to understand the Crypto 10 index

Juan Aponte by Juan Aponte - 07:45 AM Sep 21, 2019

5 key points to understand the Crypto 10 index

The crypto-market is gradually approaching the traditional financial market by getting through the big door into sectors where they were previously not allowed to operate, and by creating new structures and products so that investors can invest in crypto-money quickly, safely and.

Therefore, companies in the sector are always working on new products that allow them to position themselves at the forefront of this market. So, it is not surprising that essential brokers such as Plus500, offer financial assets that open the range of possibilities for the operations of their traders, as is the case of the Crypto 10 index, about which we bring you 5 key points so that you can understand in depth what it consists of.

1- What is an index?

Before we start talking about the Crypto 10 index, we must know precisely what these financial products consist of, and why they are so sought after by investors to form part of their portfolios of investments in the financial market.

Stock indices, as they are known, are statistical records that try to reflect the variations in the profitability or average price of a group of assets. For example, the most famous stock market index in the United States, the S&P 500, groups the 500 most valuable companies listed on Wall Street, and groups within it 80% of the capitalization of the entire American financial market, so investing in this index is equivalent to investing in the performance of the U.S. stock market as a whole.

2- What is the Crypto 10 index?

The Crypto 10 index was created to measure the performance (and invest in it) of the 10 most essential cryptocurrencies according to their market capitalization, including the price of Bitcoin, Bitcoin Cash, Ethereum, Ripple, EOS, Litecoin, Monero, Cardano, IOTA, and Dash.

3- Who created the Crypto 10 index?

The Crypto 10 index was created by BITA, a firm based in Germany, which is in charge of developing solutions for companies dedicated to financial investment, taking advantage of artificial intelligence to offer data, indexes and technological infrastructure to its clients.

4- How is the value of this index calculated?

Although the 10 cryptocurrencies chosen by BITA to make up its index represent 83% of the total cryptoactive market (around 167 billion dollars), not all of them have the same weight to define the market value of Crypto 10.

Thus, BITA assigned greater relevance to the leading cryptocurrencies, Bitcoin and Ethereum, which would define 50% of the index valuation, while smaller currencies such as IOTA would barely weigh 2.20% of the total, as can be seen in the following table:

Bita distribuyó la importancia de las criptomonedas que forman parte de su índice. Cuadro cortesía de BITA

Bita distributed the importance of the crypto coins that are part of his index. Picture by BITA

5- How can I invest in this index?

As we told you at the beginning of this article, investing in Crypto 10 is very simple, thanks to work done by Plus500, a broker that offers the opportunity to invest in contracts for difference over this index.

We must remember that Contracts for Difference (CFD) are one of the riskiest financial products. They allow to predict the increase or decrease in the value of an asset, obtaining as profit the difference between the initial price of the same one and the price that reached, in case the prediction was right, reason, why to invest in this type of instruments, can generate enormous profits, but also enormous losses if it is not done with responsibility.

About The Author
Juan Aponte

Juan AponteI am an industrial engineer specializing in blockchain. Enthusiast of cryptocurrencies and writing the latest news regarding the Crypto world.