Invstr Launches Cryptocurrency Index for Retail Investors

The Invstr Crypto Index weights assets according to their volatility

Retail trading application Invstr announced the launch of a cryptocurrency index this Tuesday.

The Invstr Crypto Index, which is now available to Invstr app users, aims to help investors track price fluctuations in the cryptocurrency market.

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Investors can also compare the price performance of specific cryptocurrencies against the overall index.

A statement released by the firm indicates that the new index will cover a range of different digital assets, including utility tokens, security tokens, and payment coins.

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Unlike many indices, this new index does not weight assets according to their market capitalization. Instead, the firm has chosen to weight each token by its volatility.

Invstr CEO: volatility more important than market cap for retail traders

The assets that make up the index will also be adjusted on a quarterly basis. Invstr said that new cryptocurrencies would only be added to the index once they reach a certain level of price maturity.

“Traditional indices measure impact on the asset class not an investor’s portfolio,” said Invstr CEO Kerim Derhalli. “If you are a large fund manager you want to know what impact you will have on the market when you enter or exit an asset class. This is not a relevant consideration for smaller investors who want to know what the impact will be on their portfolios. The Invstr Crypto Index addresses this by using weightings that optimise risk-reward based on the volatility of the constituent assets”.

Derhalli’s firm has analyzed the advantages of holding cryptocurrencies in a diversified portfolio.

The company says that it found retail investors, who have a minor exposure to cryptocurrencies in their portfolio, can improve the returns on that portfolio and reduce the volatility of its returns.

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