Launch of LyCI — the Lykke Crypto Index
The crypto revolution is developing so rapidly that it seems that new cryptocurrencies and solutions arrive almost every day.
This can make distinguishing those new crypto products with the best potential from the others more difficult amongst the noise that is inevitably created by any new revolutionary technology in its early infancy.
Furthermore, as the crypto community, the financial markets and the general public at large realize more and more the enormous potential of the crypto revolution, prices can move quickly and investors can feel like they are missing out.
So how can we cut through the noise across the markets, access these new cryptocurrencies and become part of the future of finance?
Lykke has developed a new product that can help to solve these issues — LyCI — Lykke Crypto Index.
What is the Lykke Crypto Index?
LyCI is a tool that consolidates and tracks the performance or value of a selection of underlying cryptocurrencies. This provides a snapshot of how this selection of the crypto market is performing overall in one single, easily understandable measure. This ensures that even where one cryptocurrency in the index goes up or down dramatically, the index will reflect the global performance of all the assets contained, giving a more accurate picture of overall market performance excluding idiosyncratic risks of single assets.
What assets are included in LyCI?
LyCI is a weighted index which means that the proportion of each digital assets contained in the group is dependent on their total market capitalization. LyCI takes the current mid-market prices of the 25 cryptocurrencies with the largest market capitalization — i.e. those that are worth the most in terms of total asset value.
At the time of writing the cryptocurrencies with the highest market cap and corresponding weights are (data from coinmarketcap):
Cryptocurrencies pegged to fiat currencies or other cryptocurrencies are ignored. The underlying assets are revised at regular predefined intervals to capture movements in the total market capitalization of all assets in the marketplace, with LyCI being reconstituted on this basis.
How can this help users?
There are several benefits to tracking the LyCI on a regular basis. These include:
- Useful benchmark of individual cryptocurrencies against a measure of market overall performance
- Quick and instant measure of general performance the cryptocurrency markets, as measured by the largest players
What comes next — LyCI 2.0?
This is the first version of the LyCI index. The index is for informative purposes only at the moment and is intended to provide users with a snapshot of the overall performance of these digital assets. The next step — which is coming soon — will see the index itself being investable on the market. This will mean that any individual who wishes to invest in the group of assets without having to invest in each one individually can do so, simply by purchasing units of LyCI.
What does this mean for Lykke users?
There are several large advantages to investing directly in LyCI as opposed to investing in individual crypto assets
- Reduced risk by spreading your investment across a diversified portfolio of the largest cryptocurrencies on the market
- Reduced time and energy by not having to investigate and research individual assets, picking those that you prefer and ignoring those that you do not want to invest in
- Reduced costs through not having to address spreads across several transactions but only across those transactions related to the single index (there are no commissions on the Lykke Exchange)
Stay tuned for more on the LyCI!
If you want to know more details about LyCI, you can download the index specification document:
