ICONOMI Cryptocurrencies Index (ICNX) — 30 November 2016 Monthly Rebalancing Update
Bitcoin has continued showing its strength on the uptake in India and rumours about China. On a few occasions we were close to another triggered rebalancing, but Bitcoin’s volume weighted average did not exceed $750 as its price spikes did not hold long enough.
While the value of other digital currencies expressed in bitcoin continued to fall, they did not lose much in USD. Ethereum, a strong second in terms of traded volume, was the month’s loser, but now with the cleared state and all hard forks behind it, it will be interesting to spectate whether its price drama might be ending.
In our previous rebalancing at the end of October, three currencies were forced to leave ICNX due to their average traded volumes being too low. While they were the obvious candidates for relisting, their average volume has not since grown enough to surpass the $50k daily threshold.
All other currencies have been rebalanced according to their weights/performance over the last month.
Ethereum’s new weight is lower due to market capitalization of ether falling by around 25%. At the same time, Monero’s market cap grew by approximately the same percentage points, particularly on last day of November when the Bitfinex exchange listed it, making it the second strongest currency in the ICNX. Surprisingly, STEEM has also risen in last few days of November, hence its weight has also gone up.
ZCASH and AUGUR are coming to the ICNX, but not yet! We feel that it is too soon to include them in this update as their prices are still stabilising. Besides, we have clearly stated that currencies need to be listed on exchanges for at least two months before they can join the ICNX. Augur was added to major exchanges on 7 October and Zcash only on 28 October.
New structure of the ICNX, as of 30 November 2016:
No currencies were removed.
No currencies were added.
ICNX OPEN QUESTIONS AND AMA-ICNX ANNOUNCEMENT
With December almost here, we are close to forming our first index fund ICONOMI.index which will be heavily based on what we have learned from the ICNX.
We would like to discuss the ICNX in depth with the community, as we have several options on the table. Therefore we have decided that we will not be making any structural changes to the ICNX in this month’s rebalancing. Instead we will be dedicating our next recurring AMA to our ICNX and the ICONOMI.index fund.
Please join us for an AMA-ICNX discussion on Reddit, on Wednesday 7 December at 6pm CET / 5 pm GMT-UTC / 12pm EST / 9am PST.
Some of the topics for the discussion are:
STEEM had one of the strongest crypto-growth moments of the summer, but has since lost almost all of its gains, and only few days ago it looked like it will close the year at its lowest point. The major issue with STEEM was its 160% hyper-inflation. But in mid-November STEEM’s community and developers surprisingly decided that it was time for change. STEEM’s 6 December hard fork will drastically lower the annual inflation to only 9.5%. Market reaction to this decision was very positive. But the big question remains — with fewer new STEEM tokens, can the authors still be paid enough to ensure the network growth? What do you think? We think that we would like to add an inflation-limiting rule to the ICNX methodology. Where do you see the breaking point — when does inflation become too high?
The SYNEREO (AMP) is another somewhat questionable component of the ICNX. We have stated in our own ICNX methodology that “Companies with only a small portion of their tokens available in the marketplace (less than 30%) are not eligible for the ICONOMI index.” Synereo devs have so far released only a limited amount of tokens into circulation (<10%), so we feel this currency is ready to leave the index. What should the minimum hygienic ratio between available and total token supply be? Can it be offset by a very positive long term viability of token? Do you see it in SYNEREO/AMP?
We would also like to publicly discuss our ICNX committee rules. Specifically: How ICONOMI appoints committee members; How committee members can propose new crypto to the index; How they set its initial weight; How does committee remove crypto for which it no longer sees long-term viability; Mechanics of the voting process if committee members are not unified?
We will also discuss ICONOMI.index fund’s fees.
Is there anything that you feel we have not addressed? Perhaps why are we not including coins like Ripple, which are not “copycoins” (like ETC) and nor are they losers in their categories (like LTC)?
Do you feel that overall popularity (measured against daily trading volume) should also play a role in crypto’s monthly weights change?
Once again, you are welcome to join us on our regular AMA — where we will discuss our cryptocurrencies index ICNX and the first index fund ICONOMI.index. A few days ahead of the AMA we will post the above questions (and some more), and in some sort of reverse-AMA, we will ask you to share your answers and opinions with us.
However, you are also very welcome to ask us anything ICNX/ICONOMI.index related. We will start answering on 7 December 2016 at 6pm CET / 5pm GMT+UTC / 12pm EST / 9am PST. See you at ICONOMI subreddit at https://reddit.com/r/ICONOMI