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Explained: India’s first crypto index and what it means for investors in India

Explained: India's first crypto index and what it means for investors in India
Written by publisher team

New Delhi: India has the Bombay Stock Exchange and the National Stock Exchange StocK, but we now have our own Crypto Index, which will monitor the performance of the 15 most traded cryptocurrencies listed on crypto exchanges globally.
The IC15 Index, launched by the global super-crypto app, will serve as a benchmark in the digital markets that will provide a diversified representation across the increasingly diverse cryptocurrency markets. The overall objective of the index is to provide insights into the products associated with the index such as ETFs and funds. . By tracking the value of a group of cryptocurrencies, investors can avoid the risks of investing in a single digital currency.
What is a cryptocurrency index?

The cryptocurrency index known as IC15 was launched by the global cryptocurrency superhero Cryptowire. It is a broad, rule-based market index by market capitalization, which tracks the performance of the top 15 most widely traded liquid cryptocurrencies, by market capitalization.
The index includes the Governance Committee (IGC). It includes prominent industry experts, academics and industry practitioners. These experts will monitor, maintain and manage the rebalancing of the top 15 cryptocurrencies every quarter. The base date is April 1, 2018 while the base value of the index is set at 10,000. This index accounts for more than 80 percent of the market movement.
How is IC15 built?
The index will choose cryptocurrencies among the top 400 currencies based on market capitalization. The eligible cryptocurrency must have been traded on at least 90% of the days during the review period and be among the 100 most liquid cryptocurrencies by turnover. The cryptocurrency should be in the top 50 by market cap in circulation as well.
What cryptocurrency has the maximum weight?
The 15 most widely listed cryptocurrencies listed on cryptocurrency exchanges include Bitcoin, Ethereum, Litecoin, Binance Coin, Chainlink, XRP, Bitcoin Cash, Cardano, Solana, Terra, Avalanche, Polkadot, Uniswap, Dogecoin and Shia Inu in the IC15 Index. Among the tokens, Bitcoin has the highest weight, at 51.57, while Ethereum carries a weight of 25.79 in the index. Binance Coin came in third with a weight of 5.03.

How is the index value calculated?
The index value is equal to the total traded market capitalization of the index basket divided by the index divisor and then multiplied by the base value of 10,000. The denominator is calculated based on the traded market capitalization of all components of the index. “A cryptocurrency index fund is a way for investors to track the value of a group of cryptocurrencies participating in an index. The value of a cryptocurrency index fund is related to the total aggregate value of the cryptocurrencies it tracks,” explains Vinay Meyer. , Marketing Research & Consulting @ Asia Research Partners LLP.
What is the main goal behind the indicator?
The index allows crypto enthusiasts, investors and investment managers to monitor the performance of cryptocurrencies in global markets. IC15 is India’s first index that can serve as a benchmark for the cryptocurrency market and a performance benchmark for fund managers to create index-linked products like index funds, ETFs, etc.
Its main objectives are
• Insights for cryptocurrency mining.
• To be the true benchmark and mirror of the underlying crypto market
• Offer an easy-to-follow solution for having a diversified portfolio.
• Act as a benchmark for fund managers’ performance.
• Uniquely positioned indicator for efficient derivatives trading in cryptocurrency
trading market.
Eligibility criteria:
◆ Top 400 coins by market value
◆ Only cryptocurrencies are considered
◆ Stable coins are not eligible
Create index basket
◆ The top 15 cryptocurrencies by market capitalization in circulation are eligible to be part of the index.
◆ The Index Committee decides the final basket of IC15 and may consider a mid-term review of the index basket in exceptional cases
◆ The eligible component of the index must be among the top 50 indices by market capitalization traded during the previous month
The deadline for the review period should be the 15th of March, June, September and December.
The index “will not only drive the ‘learning before earning’ initiative but also serve the industry with another robust intervention,” said Gigesh Sunagara, managing director and CEO of CryptoWire.
What kind of returns has the index provided so far when compared to other market indices?
IC15 is up 138% in 2021 compared to a return of 24% by Nifty 50, -3% by Gold, and 27% by the S&P 500. 2020 saw the index rise by a whopping 294% but in 2018, the IC15 is down by 50 percent. In 2018, other asset classes saw a decline of only 3-4 percent.

How does the index work?
An index is a way to track the performance of a group of related assets. It is essentially an economic metric that measures changes in market value, performance, and changes in value that depend on currency, stocks, bonds, or entire markets. Over the past few years, cryptocurrencies have gained popularity and acceptance. These new digital currencies primarily operate using blockchain technology.
The index is currently based on a base value of 10,000 (determined on April 1, 2018) and derives its value from a variety of factors, such as trading volume on exchanges, futures activity, market value changes, and more.

“It appears that an index that claims to account for more than 80 percent of the market movement could be an essential tool for tracking if not just one of those accepted cryptocurrencies. As it becomes more popular, it is more likely to allow investors to access it from During an index that brings some much-needed transparency in terms of knowing how each currency is performing individually or as a group with other types of investments within a diversified portfolio,” said Vinay K. Meyer, Marketing Research & Consulting @ Asia Research Partners LLP.
biggest risk?
The cryptocurrency market is very unstable. For example, Ethereum, at the beginning of 2017, the price was close to about $40, which later rose to nearly $400 and dropped to $150-$200. “If you look at the weight of the index, only two cryptocurrencies – Bitcoin (51.57) and Ethereum (25.79) make up the bulk. This makes the index very vulnerable to price movements in two cryptocurrencies. Moreover, there is no regulatory support for cryptocurrencies, and it is found in other investments.
How is India benefiting from the cryptocurrency index?
Index-based investing leads to diversification and is better than investing in individual coins. “The Crypto Index will track some of the best cryptocurrencies by market capitalization and, therefore, eliminate random tokens that have no base value or viable use case. Indian investors are usually risk averse compared to our Western counterparts. Hence, cryptocurrency will be the benchmark An ideal benchmark for Indian investors residing in the cryptocurrency market,” said Edul Patel, CEO and co-founder of Mudrex.
“The creation of a balanced index of cryptocurrencies in India will serve as a basis for different types of financial products, such as ETFs and crypto funds. This will help provide benchmarks for fund managers,” Mayer said.
What does this mean for current crypto investors?
“For existing investors, the index will help them understand the integrated details about the entire crypto ecosystem and also provide solutions for diversified investments in crypto. Since the crypto market is always subject to speculation, this is a great move to help an evolving cryptocurrency,” said Shruti Kaushik, a blockchain writer and marketing expert.
But in the absence of regulation, can fund managers really launch crypto funds?
Investing and trading in crypto assets is allowed in India but the laws are not clear as to how they are regulated and taxed.
Just last week, the market regulator, the Securities and Exchange Board of India (Sebi), banned local mutual fund operators from making crypto-related investments until there is a law for such digital assets. The center is in the midst of bringing a cryptocurrency bill to Parliament, which is expected to be introduced at the upcoming budget session. Sebi’s warning came after asset manager Invesco Mutual Fund postponed the launch of a blockchain fund – the first of its kind in India – due to legislative uncertainty. Similarly, Sachin Bansal-backed Navi Mutual Fund has submitted an offer document with Sebi for the blockchain index fund. The scheme will be linked to the Indxx Blockchain Index, a measure of the performance of companies connected to the blockchain ecosystem.
“The regulatory gray area still exists when it comes to launching crypto mutual funds. When there is more clarity around these regulations, we can expect fund managers to come up with crypto funds,” Patel said.

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