Here come the indexes. First bitcoin was just a piece of worthless ‘junk’, then it began going up and a few other cryptos popped up to join in. Then, the world noticed and accepted the potential and game changing world of digital currencies. Now, there are futures, options and exchanges springing up to trade/invest in bitcoin. SO, what’s next? Indexes. Ways to track cryptos and establish benchmarks. Fun’s over. Now if “billycoin” outperforms bitcoin and you didn’t have “billycoin” your AUM drops when investors pull out. Before Indexes, no one knew. This acceptance and growing up does have drawbacks. Thanks Fundstrat.
“A prominent Wall Street strategist who predicted bitcoin could more than quadruple in value in five years has created five indexes to track digital currencies.
Fundstrat Global Advisors’ Thomas Lee said in a report Friday that the FS Crypto FX indexes are for institutional investors “to better understand the evolution and behavior of crypto-currencies.”
In July, Lee, former chief equity strategist at JPMorgan Chase, boldly predicted bitcoin could be worth more than $20,000 by 2022. On Friday, it hit a high for the day of $4,417.45. He was the first major Wall Street strategist to formally present his views on bitcoin, and remains the only one.
Fundstrat’s indexes track a total of 630 digital currencies, divided into five groups by market capitalization and trading volume.
Investors can then analyze the relative performance of different digital currencies within the indexes, similar to how the advance-decline line of the number of S&P 500 stocks rising versus falling on a given day can indicate the health of the market.
The advance-decline line for digital currencies peaked in June, Fundstrat technical strategist Rob Sluymer, said. “It gives us a sense that something’s happening in the cryptocurrency move, that you don’t have the same speculative move as you had in the first quarter, second quarter,” Sluymer told CNBC in a phone interview…”
Full Story at CNBC