How Binance CoinMarketCap Index will work?

[a298b112]

According to this news article Binance will start offering CoinMarketCap Index Series. And now I am trying to understand how it will work? Like when you buy this index Binance will buy all those top 10 crypto assets in equal amount and keep it? I mean is there a real crypto assets behind the index?

[jackg]

They've not been explicit on what they're actually doing (and that's probably because you can do it yourself if they were).

https://coinmarketcap.com/indices/

They're not managing the funds themselves though, a German company I haven't heard of is. I don't know how I'd expect a fund like this to do, with so much rebalancing (every quarter) would there really be a chance at strong growth when a coin's profit gets realised. I can also imagine this under performing bitcoin in bull times and catching up to it in bear periods.

[Dr.Bitcoin_Strange]

According to this news article Binance will start offering CoinMarketCap Index Series. And now I am trying to understand how it will work? Like when you buy this index Binance will buy all those top 10 crypto assets in equal amount and keep it? I mean is there a real crypto assets behind the index?

Trying to understand the Binance CMC index, I just learned that users can use it to track the values of digital assets and currencies. And the crypto assets in the index will be weighted and rebalanced every month.

In other words, for individuals that are going to use the Binance CMC index, the system will select the cryptoassets in the index and distribute your funds across the index using dollar-cost averaging as well as auto-invest.

If you love to read, this article was more comprehensive.: https://www.binance.com/en/support/announcement/0ece0aaab0b442d293e1be2eae60a19d?ref=AZTKZ9XS&utm_source=BinanceTwitter&utm_medium=GlobalSocial&utm_campaign=GlobalSocial

If you love to watch videos, this one has a simple explanation.: https://twitter.com/binance/status/1514710161482465281?t=E4T_1-kw1VUQWrRAWCFj1g&s=19

[Bitcoin_Arena]

Trying to understand the Binance CMC index, I just learned that users can use it to track the values of digital assets and currencies. And the crypto assets in the index will be weighted and rebalanced every month.

But the link shared by jackg suggests that re-balancing will be done Quarterly

I however wonder what happens to stablecoins since most of them are in the top 200 and those coins that sharply pump and dump due to manipulation. Maybe they have some criteria to filter such coins out.

[Dr.Bitcoin_Strange]

But the link shared by jackg suggests that re-balancing will be done Quarterly

Rikafip surges that each asset is rebalanced monthly while the index is done quarterly. I think you should see the quote below.

Each asset is rebalanced on the monthly basis while index itself on the quarterly basis so I am not sure what's the problem here.