The Crypto 10 Index, constructed by index software company BITA, offers traders the ability to track the performance of the wider asset class, with the benchmark allowing investors to trade market sentiment and volatility of the crypto market in real-time whilst minimising risk of exposure to sharp movements in a single currency.
The move reflects the growing perception of cryptocurrencies as a means to hedge against the broader pool of traditional instruments, with investors seeing this asset class as a means to further diversify their portfolios. Traders can choose from multiple crypto and forex pairs too, bringing new ways to trade volatility to hedge against inflation and market uncertainties.
The Crypto 10 Index is just one of over than 2,500 underlying global financial instruments offered by Plus500, comprising equities, indices, commodities, options, ETFs, foreign exchange and cryptocurrencies.
The Promise of Crypto Assets
The top cryptocurrencies recorded a 159% increase in market value between January 5 and December 2020. The bullish narrative continued well into 2021, with Bitcoin reaching an all-time high of $64,863 in April, reflecting increased mainstream awareness of the world’s first decentralized cryptocurrency.
Meanwhile, decentralised finance (DeFi) applications on the Ethereum protocol have captured the imagination of both corporates and investors, as have NFTs. New projects, scaling solutions and network launches have dominated this landscape, propelling the crypto market to a market cap of $2 trillion for the first time ever in April 2021.
Inflation Might Be Here Sooner Than We Thought
High amounts of fiscal stimulus and loose monetary policies might have helped countries battle the pandemic-induced economic devastation. But it has raised inflationary pressure. In the latest meeting of the US Fed, on June 16, 2021, the central bank projected personal consumption expenditure (PCE) to increase to 3.4% this year. At the same time, the central bank has no intention to raise interest rates, while continuing with its bond-buying program at $120 billion per month.
Devoid of influence from any central bank, cryptocurrencies offer the means to hedge against economic uncertainty and inflation risks. Bitcoin (BTC), in particular, with its limited supply, is considered digital gold. It is traded as an inflationary hedge, which drove the digital currency’s price up more than 300% in 2020. In 2021, BTC came under pressure from Elon Musk’s comments on its energy inefficiency. In addition, China’s crackdown on cryptocurrency mining in the nation was also a setback. However, the asset is here to stay, which can be seen from the way Bitcoin recovered from the China effect, rising 13% YTD on June 23.
From crypto hedge funds to venture capital, and asset managers to traditional corporate offices, cryptocurrency has become an accepted means for portfolio diversification. Global economies and more traditional institutions are also…
Read more:Plus500 Offers Exposure to the Top 10 Cryptos in a Single Trade
