ICONOMI Cryptocurrencies Index (ICNX) — UPDATE #1
STATUS: Work in progress, subject to change
The ICNX measures the performance of cryptocurrencies that meet the ICONOMI eligibility criteria. Index constituents and their corresponding weights are updated on a monthly basis or more frequently due to the fast changing environment of the cryptocurrency market. The currencies currently included in the index represent 92% of the total market capitalisation of cryptocurrencies. Index price and its structure is published and updated every 5 minutes on the https://ico.iconomi.net website. Index inception date is 1.7.2016.
Eligibility criteria for inclusion
- Currency must be in existence and have been traded on recognised exchanges for at least 2 months.
- Market capitalisation of currency must reach min. $1,000,000.
- The currency must be based on blockchain technology and traded on at least one of recognised exchanges: Poloniex, Kraken and Bittrex (additional exchanges might be added later).
- Daily volume of cc over major exchanges must exceed $50k, averaged over 30 days.
- There is currently no cap on the number of currencies inside the ICNX.
- The currency must have an underlying concept which ICONOMI estimates as viable in the long term.
- Companies with only a small portion of their tokens available in the marketplace (less than 30%) are not eligible for the ICONOMI index.
Index structure is based on market capitalisation of cryptocurrencies, where additional adjustments are made due to the high concentration of the top few cryptocurrencies:
- The top currency has a limited weight of max. 15%
- Currencies with larger market cap have their weight based on a logarithm of market cap value*
- Currencies with smaller market cap have weight based on nominal value of market cap
- ICONOMI pursues a structure that delivers diversification benefits/minimises risk and at the same time tries to mimic the current cryptocurrency market
- When more than 30 eligible currencies have been added to the index, the categorisation rule will be applied (i.e. industries will be defined and each industry will have corresponding weight with floor and cap applied depending on market cap)
- Index rebalancing is performed at each month end or more regularly if ICONOMI deems it necessary
- During rebalancing periods, the structure may move from the defined criteria and the banding rule will be applied
*Log has to be taken in order to get a more fragmented structure of index. Log is applied only for those currencies which would otherwise have too large a weight (i.e. Bitcoin with app. 80% weight).
Index rebalancing is performed at each end of month or more regularly if ICONOMI deems it necessary. Between rebalancing periods, index constituents’ weights move proportionally to their price movements. If the weight of a specific currency surpasses 20%, the index is rebalanced immediately. ICONOMI appoints a committee that determines the composition of the index at each rebalancing. The committee members propose the addition of new members to the index as well as their weightings and the potential removal of certain members. The final decision is taken with a vote. Additions and deletions of new or old members to the index will be explained to the public as they occur.
Past rebalancing dates are: 31/07/2016, 31/08/2016 and 23/09/2016
Calculation frequency and currency
- Index price is updated every 5 minutes.
- The prices of currencies inside the index are taken from coinmarketcap.com and represent the average price of each currency at the major exchanges weighted by its volume.
- The calculation currency is USD.