Financial strategist at Fundstrat Global Advisors Tom Lee has developed five indices to monitor the dynamics of different liquidity of cryptocurrencies. About this analyst said in an interview with CNBC.
So, according to Lee, he created the indices are collectively called Crypto FS and FX created for a better understanding of institutional investors “the evolution and behaviour of cryptocurrencies”.
Indices from the company Fundstrat track a total of 630 different cryptocurrencies, which are classified by market capitalization and trading volume in five groups:
FS Crypto 10 is the top 10 cryptocurrencies by market capitalization and includes a bitcoin, Ethereum, Ripple, Litecoin, DASH, IOTA, Monero, etc.;
FS Crypto 40 – includes cryptocurrencies, which are indicators of capitalization and liquidity take place from 11 th to 50 th;
Crypto FS 250 – tracks cryptocurrencies, who is from 51 to 300-th place in terms of capitalization and liquidity and includes such digital currencies as BitcoinDark, a Singular DTV, FirstCoin, etc.;
FS Crypto 300 – tracks 300 of the most popular and most liquid cryptocurrency;
FS Crypto Aggregate is 630 cryptocurrency.
According to Lee, these indexes will allow investors to analyze the dynamics of various digital currencies and will perform the same function as the one that performs the S&P 500 to determine the current state of the securities market.
Also Fundstrat noted that the developed algorithm will allow to estimate the proportion of individual crypto-currencies in each of the indexes. The composition of the indices will be reviewed quarterly.
It is worth noting that such indexes have been created previously. For example, in July entrepreneur Roger Bryan has launched a Digital Currency Index, which tracks 30 of the most popular digital currency. Tom Lee expressed confidence that the establishment of such indices is evidence of the development of the market and growing interest from institutional investors. He also stressed that the daily trading volume of the index FS Crypto 10 “unusually high” and is $3.5 billion.
Finally, Li pointed out that even 2% of the cryptocurrency allows by 2.29% to increase the profitability of traditional investment securities portfolio primarily consisting of stocks and bonds.
We will remind, in August, Tom Lee has shared his forecast, stating that by the middle of next year bitcoin will reach $6,000, and by 2022 the price of “digital gold” will be $25 000.