Huobi Pro Unveils 10-Currency Crypto Index
Digital currency exchange Huobi Pro is launching a new crypto market index for its customers, the latest in a series of initiatives designed to boost cryptocurrency adoption.
Huobi Main Force Index
The Singapore-based exchange announced Wednesday it will be launching the Huobi Main Force Index, which is designed to track ten large digital assets pegged to Tether (USDT), a dollar-pegged cryptocurrency. Beginning next month, traders will be able to access the index in real time on the Huobi Pro platform.
According to an official press release, the ten-currency index will “reflect the overall performance of the Huobi Pro market,” providing investors with a single point of reference. The company has not provided any details about which currencies will be included in the index, although names like bitcoin, Ethereum, Litecoin and Ripple XRP are likely to be included.
“Assets will be ranked according to their turnover, and top assets of each category will be selected as index samples,” read the press release. “After samples are selected, the sample weight will be calculated based on the daily average trading volume of the previous quarter.”
Huobi has also set up a contingency plan for cryptocurrencies that are delisted from the exchange. In this case, the sample will be “temporarily replaced,” while remaining coins “that are ranked first in the candidate list will be selected as the sample coins in turn.”
The exchange plans to offer other market-tracking indices in the future, though it declined to comment on specifics.
Huobi is the world’s third-largest cryptocurrency exchange by volume with daily turnover of more than $1.1 billion.
Crypto Market Innovation on the Rise
Indexing is just one of a series of innovations influencing the cryptocurrency market. It joins derivatives, publicly-traded funds, private funds and hedge funds in ushering a new era of cryptocurrency trading whose influence extends far beyond the retail investor.
Digital currency exchange Coinbase recently announced a new suite of products targeting institutional investors, including custodial services that offer more safeguards for crypto holdings. The San Francisco-based exchange believes it can unlock up to $10 billion in institutional money currently sitting on the sidelines.
Hedge funds are increasingly pivoting toward cryptocurrency, with the number of ‘crypto hedge funds’ surging 64% over the past year. More than 100 hedge funds have been launched to trade cryptocurrency exclusively over the period.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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