CME Group cryptocurrency indexes have received two separate lines: the Emerging Crypto Index for ten major altcoins and the Crypto Market Index, which also includes Bitcoin and Ether. This format allows market participants to track the dynamics of leading crypto assets both with and without the influence of the two largest coins.
What Is Included in the Emerging Crypto Index and Crypto Market Index
The composition of the two baskets is conveniently compared as follows:
- Emerging Crypto Index: BNB, XRP, Solana (SOL), Hyperliquid (HYPE), Chainlink (LINK), Stellar Lumens (XLM), Sui (SUI), Uniswap (UNI), Avalanche (AVAX), and Aave (AAVE). Bitcoin and Ether are intentionally excluded from this basket so that the index reflects the movement of ten prominent altcoins without the dominance of the two largest cryptocurrencies.
- Crypto Market Index: 12 crypto assets, including Bitcoin and Ether.
For investors, this provides a more complete picture of the market, while the Emerging Crypto Index helps to separately assess the segment of large alternative coins.
How CME Group Calculates Indexes
CME Group updates the values of both indexes in several modes:
- Real-time updates 24 hours a day.
- Fixed daily price at 4:00 p.m. London time.
- Fixed daily price at 4:00 p.m. New York time.
- Fixed daily price at 4:00 p.m. Singapore/Hong Kong time.
Market capitalization plays a key role in the calculations. The higher the market capitalization of a particular cryptocurrency, the greater the weight this asset receives in the index. In essence, this is similar to how an asset is valued in accounting by its worth: the more significant the position, the more it affects the overall result.
The composition of CME Group baskets will be updated according to a predetermined schedule:
- Basket composition review twice a year.
- Rebalancing on the first business day of June.
- Rebalancing on the first business day of December.
What Selection Rules Apply to Crypto Assets
To be included in the Emerging Crypto Index, a cryptocurrency must pass several filters:
- Sufficient market capitalization.
- Compliance with secure storage requirements.
- Exclusion of meme coins from the index.
- TVL assessment relative to fully diluted market capitalization.
- For coins that do not yet meet the listing standards of cryptocurrency exchange-traded funds (ETFs), a separate rule applies: they may enter the index if they meet the requirements within 30 days, but their total share must not exceed 10%.
Context: Other Cryptocurrency Indexes on the Market
There are already similar index products on the market:
- Nasdaq CME Crypto Index: Bitcoin, Ether, Bitcoin Cash (BCH), Solana (SOL), Ripple (XRP), Cardano (ADA), Chainlink (LINK), and Stellar Lumens (XLM). This is a CME Group cryptocurrency futures index launched in June.
- CoinGecko 2023 Index: BNB, Cardano, Solana, and Tron became the leaders of the basket of the largest cryptocurrencies that US authorities classified as securities.
For the market, such products are no less important than the data traders receive through exchanges, APIs, or aggregators like CoinMarketCap: indexes provide a ready-made model for tracking entire groups of crypto assets and help to more quickly assess the dynamics of individual segments.
Cryptocurrency indexes help you quickly understand how not just one coin, but an entire segment of the market is moving.
How to Use Cryptocurrency Indexes in Investments
Cryptocurrency indexes can be used as a benchmark for diversification and assessing market trends:
- Portfolio diversification: the index shows a basket of assets, not just one coin, so it helps distribute attention among several crypto assets.
- Trend assessment: if the index rises or falls, the investor can quickly see the sentiment in the entire market segment.
- Segment comparison: the Crypto Market Index shows a broader market with Bitcoin and Ether, while the Emerging Crypto Index helps to look at large altcoins separately.
- Passive investing: index products can be used as the basis for strategies where the investor follows a basket of assets rather than selecting each coin manually.
Where to Track Cryptocurrency Indexes
You can track indexes and related data through several types of platforms:
- CoinMarketCap: the aggregator helps you track the dynamics of crypto assets, compare them with each other, and quickly assess the state of the market.
- CoinGecko: the service shows data on cryptocurrencies and index baskets, including separate asset selections.
- Exchange and index provider websites: these usually publish basket compositions, calculation methodologies, and current index values.
- APIs and market aggregators: suitable for those who want to receive data automatically and use it in their own models or trading panels.
- Coins around $1: it is better to check their current price on CoinMarketCap or CoinGecko, as cryptocurrency prices change quickly.
Indicators and Signals for Cryptocurrency Analysis
There is no universal indicator for cryptocurrency analysis, so traders usually look at several tools at once:
- RSI: helps assess whether an asset appears overbought or oversold.
- MACD: shows the ratio of two moving averages and helps track momentum shifts.
- Moving averages: smooth out the price and help to see the overall trend without excessive market noise.
Signals for buying are usually divided into technical and fundamental:
- Technical signal: crossing of moving averages when the faster average rises above the slower one.
- Technical signal: increase in trading volume along with price movement.
- Fundamental signal: news about listing on a major platform.
- Fundamental signal: the appearance of an index product that increases attention to an entire group of crypto assets.
10 Crypto Assets From the CME Group Basket as a Benchmark
If you need a benchmark for ten major altcoins, you can look at the composition of the Emerging Crypto Index:
- BNB: included in the CME Group basket and participates in assessing the segment of large altcoins without Bitcoin and Ether.
- XRP: included in the Emerging Crypto Index as one of the notable alternative crypto assets.
- Solana (SOL): helps reflect the dynamics of large altcoins within a separate index basket.
- Hyperliquid (HYPE): included in the list of assets that CME Group uses for the Emerging Crypto Index.
- Chainlink (LINK): represented in the basket along with other major altcoins.
- Stellar Lumens (XLM): included in the index set for tracking the segment of alternative coins.
- Sui (SUI): included in the Emerging Crypto Index and considered in the basket calculation.
- Uniswap (UNI): represented among the ten assets selected for the CME Group index.
- Avalanche (AVAX): included in the basket of major altcoins without the influence of Bitcoin and Ether.
- Aave (AAVE): included in the Emerging Crypto Index and complements the list of ten basket assets.
