BarclayHedge’s newest index, the Barclay Cryptocurrency Traders Index, dropped 29.2 per cent in March. Year to date, the Index is down 43.1 per cent after three consecutive monthly losses.
“Within days of the launch of Bitcoin futures, Bitcoin rose to its all-time high of just under USD20,000 on December 18 last year. Today’s prices are just over USD8,000. Folks have their opinions, but no one really knows if it’s a bubble or a correction,” says Sol Waksman (pictured), president and founder of BarclayHedge.
The Barclay Cryptocurrency Traders Index is an equal-weighted index of the monthly returns of a representative universe of 19 constituent funds that trade Bitcoin and other cryptocurrencies. BarclayHedge started the Index in 2018.
“Based on the knowledge gained from our 32 years of experience in collecting, compiling, analysing, and indexing performance data from alternative investment funds, we wanted to minimise statistical biases which can distort historical index returns,” Waksman says. “We chose a January 2018 start date to avoid survivorship bias, backdating and selection bias.”
Cryptocurrencies like Bitcoin and its competitors enable secure, verifiable transactions that are extremely difficult to copy or counterfeit. Investments in the cryptocurrency sector exploded in 2017, leading to the December launch of trading in Bitcoin futures by CME Group (CME) and Cboe Global Markets (Cboe).
“The ability to trade Bitcoin futures on exchanges such as CME and Cboe, which are respected worldwide, provides a much-needed level of transparency, investor safety, and credibility to the price–discovery process and creates a level of institutional legitimacy that is crucial for growth in this sector,” Waksman says.
The Cryptocurrency Traders Index is the latest in a long line of BarclayHedge indexes tracking multiple sectors in the hedge fund and alternative investment universe. In addition to its 25 proprietary indices, BarclayHedge maintains 148 additional hedge fund indices for financial institutions in North America and Europe in its role as an independent index calculation agent.
