Crypto world gains even more options to customize

In a cryptocurrency universe of more than 1,500 tokens, Fundstrat Global Advisors LLC has launched five additional price indexes to give investors even more ways to customize.

The five gauges — based on the sectors Commodities, Platforms, Privacy, Exchanges and Stable-coins — include 75 per cent of today’s crypto market cap. Commodity tokens comprise the largest chunk, at 47 per cent, but that’s because the index components are Bitcoin, Bitcoin cash, Litecoin, Monero and Zcash.

Prospective investors may want to look at the make-up of the indexes before jumping in, as they aren’t necessarily getting so much diversification. The Privacy index, for instance, has four components. The Stablecoin gauge has just two, with a 99-per-cent weight to Tether and one per cent to DAI.

Fundstrat remains optimistic on the long-term success of Bitcoin, the largest and most widely held of the cryptocurrencies.

“Commodity tokens, in our view, are on-ramps for institutional inflows, given the expanding options for access (futures, etc.),” strategists including Thomas Lee, Robert Sluymer and Sam Doctor wrote in a note Thursday.

“And commodity tokens face less regulatory risk relative to other types of tokens at the moment.”

Fundstrat cites regulatory risks excessively priced into platform tokens as the primary rationale behind creating the new benchmarks. Previously, the firm said it mainly chose indexes based on size. With the crypto marketplace continuously growing, Fundstrat said it will be creating additional sector gauges as “other thematic areas mature or become more evident.”