How Coinswitch Kuber’s ‘Crypto Rupee Index’ will help make investment decisions

Ashish Singhal co-founder of CoinSwitch Kuber, a cryptocurrency exchange platform, on Thursday, said, “How’s the Indian Crypto market doing? Every time I’m asked this question, I’m reminded of a missing piece: There is no accurate measure of the Indian.”

Singhal pointed out that until now, investors in India had to rely on international indices based on US Dollar. But these indices do not give the true picture of the Indian market and miss the supply-demand dynamics of India’s growing investor base.

Thereby, he said, “we are fixing this” and launched the CRE8, the Crypto Rupee Index. He added that CRE8 gives you real-time info of the Indian Rupee-based Crypto market, based on actual trades on our platform. It represents 85% of the Crypto market capitalization.

“CRE8 is a demonstration of our commitment to bring more transparency to the Indian Crypto market and equip users with a simple, easy-to-understand measure of the Indian market. The Index enables Indian users to make informed investment decisions.” Singhal said.

That said, the co-founder exclaimed that Indian investors and market observers no longer have to second-guess how the Indian Crypto market is behaving. They can view it in real-time.

Also, Singhal said, “If you are a publisher, you run an app or a crypto website where you want to show your users the state of the Indian crypto market using CRE8 index, hit us up on support@coinswitch.co. We’re working on making APIs and embed codes for CRE8. Would love to hear from you.”

Here’s how CRE8 works:

Firstly, CRE8 is an Indian Rupee denominated, well-diversified Virtual Digital Asset (crypto) index reflecting Indian market conditions. It reflects the dynamics of virtual crypto assets, web3, and innovation.

The constituents of the CRE8 are chosen among the top 8 crypto assets in terms of market capitalisation and should be listed on the CoinSwitch platform. Further, these constituents should not be a stable coin and derivative of any existing index component.

Currently, on the CRE8, today, the top 8 crypto assets are Bitcoin (BTC) taking the top spot with a weightage of 36.20%, followed by Ethereum (ETH) with a weightage of 23.40%, Binance Coin (BNB) with a weightage of 11.10%, Ripple (XRP) with weightage of 6.70%, Cardano (ADA) with weightage of 6.30%, Solana (SOL) with weightage of 6.10%, Polkadot (DOT) with weightage of 5.20%, and Dogecoin (DOGE) with weightage of 5%.

It needs to be noted that the index is rebalanced monthly and reconstituted quarterly.

The index is rebalanced every month to address the market conditions. Rebalancing is the reorganization of the weights of the index based on the changes in market capitalisation of the crypto assets.

Meanwhile, reconstitution takes place quarterly when the constituent crypto in an index is updated based on the market capitalization.

Accordingly, the constituents on the index will change as the market capitalisation of a cryptocurrency changes.

At CRE8, the opening prices are Real-Time Index levels at 12:00 AM IST. While the closing price is at 11:59 PM IST.

Also, there is a term called CRE8 4 PM Daily Fix which means that the platform uses the closing value at 4:00 PM IST for publishing purposes despite crypto markets operating 24X7.

The index moves upward and downwards which is indicative of the expectations of the market.

CoinSwitch explains that when the mood is optimistic, i.e. investors expect that the Crypto will perform better and make a transaction, the index goes up. The index will fall, if the view about the future turns pessimistic and transactions decline.

However, an investor cannot invest or trade on CRE8 as the index is only for understanding the movement in the crypto market and helping investors make their crypto investment decisions.

Index Calculation:

CRE8 is computed using the square root of the market capitalization method wherein the level of the Index reflects the total market value of all the cryptos/VDA’s in the Index relative to the base period of October 1, 2020.

Individual Crypto Value = (Current Market Value / Base Market Value ) * Base Index Value.

Notably, the ‘index value’ is equal to the sum of all individual crypto values.

The ‘current market value’ is the price of a crypto today. Meanwhile, the ‘base market value is the price of crypto on the rebalance day. As for the ‘base index value’, it is the percentage share of crypto (in the latest rebalance multiplied by the closing price of the Index on the last day of the rebalancing month). Lastly, ‘market capitalisation is equal to circulating supply.