Crypto Index Tracker: Crypto Markets Stabilise
- By Bilal Hafeez and Dalvir Mandara
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- 3 min read
Crypto markets have stabilised somewhat after bottoming out on 18 June. Bitcoin has reclaimed $20,000 and has been trading in a range between $19,700 and $21,500 for most of this week. US stocks also closed higher on Thursday after Fed Chair Jerome Powell said the Fed is ‘strongly committed to bringing inflation back down’ during the congressional testimony.
As for the performance of our various indexes, they are all in the green (Charts 1 and 2). Our DeFi Index leads gains at 24% followed by our Smart Contract and Privacy Indexes at around 10% each. Our Metaverse and Bitcoin Indexes are up the least at 8% and 3%, respectively.
Correlation between our Bitcoin Index and the others are down compared to last month except for our DeFi Index (Chart 3). On macro markets, bitcoin’s correlation to tech stocks drops compared to that of last month. Meanwhile, its correlation to Oil has increases (Chart 4).
- Smart Contract Platform Index: Solana (SOL) is up the most at 27%, followed by Fantom (FTM) at 23%. Terra (LUNA) is flat on the week. Ethereum is up 7%.
- DeFi Index: Uniswap (UNI) is up the most at 47%. Notably, Aave (AAVE), 1inch (1INCH), Thorchain (RUNE), Maker (MKR), and Compound (COMP) are all up over 20%. Terra (LUNA) is flat on the week.
- Metaverse Index: Enjin Coin (ENJ) is up the most at 22%, followed by The Sandbox (SAND) at 21%. RedFOX Labs (RFOX) is down the most at 3%.
- Privacy Index: All coins are up in this index. Dash (DASH) is up the most at 16% and Keep Network (KEEP) is up the least at 5%.
- Bitcoin: this is up 3%.
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.