Crypto Index Tracker: Bitcoin Outperforms
- By Bilal Hafeez and Dalvir Mandara
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- 3 min read
Crypto markets rallied on Monday, but performance has not been uniform across coins or sectors. We also note that the correlation between crypto markets and tech stocks is being tested following the TerraUSD/Luna collapse (see our latest update on stablecoins) and our latest ethereum update dives into whether or not ethereum is the inflation hedge that everyone thinks.
As for the performance of our various indexes, performance is mixed (Charts 1 and 2). Our Bitcoin Index is leading gains at 7% followed by our Metaverse Index at 4%. Our Smart Contract and Privacy Indexes are both up around 1%. Lastly, our DeFi Index is the only one to have registered losses this week (2%).
Correlation between our Bitcoin Index and the rest are above 83% having decreased slightly from that of 30 days ago (Chart 3). On macro markets bitcoin’s correlation to tech stocks has come down significantly and it is now positively correlated with Oil and Gold (Chart 4).
- Smart Contract Platform Index: Cardano (ADA) is up the most at 21% and Terra (LUNA) is down the most at 37%. Ethereum (ETH) is down 2%.
- DeFi Index: Aave (AAVE) is up the most at 7% and Terra (LUNA) is down the most at 37%.
- Metaverse Index: Axie Infinity (AXS) is up the most at 13% and Aavegotchi (GHST) is down the most at 3%.
- Privacy Index: Beam (BEAM) is up the most at 14% and Secret (SCRT) is down the most at 18%.
- Bitcoin: this is up 7%.
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 decentralised 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).
- Decentralised Finance (DeFi): financial services built on top of blockchain networks with no central intermediaries. This can be a broad category, so we narrow this down to platforms that focus on lending/borrowing, yield farming, automated market making and decentralised 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 to maintain the anonymity of its users and their activity. The constituents of this index are Monero (XMR), Zcash (ZEC), Dash (DASH), Verge (XVG), Horizen (ZEN), Beam (BEAM), Secret (SCRT), Decred (DCR), Keep Network (KEEP), and Dusk Network (DUSK).
Dalvir Mandara is a Quantitative Researcher at Macro Hive. Dalvir has a BSc Mathematics and Computer Science and an MSc Mathematical Finance both from the University of Birmingham. His areas of interest are in the applications of machine learning, deep learning and alternative data for predictive modelling of financial markets.
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.