Crypto Analytics firm Coin Metrics declared that it has purchased the digital asset index firm Bletchley Indexes and aims to release crypto smart beta indexes. The latest news was shared through a blog post published on June 7.
According to the announcement, the acquired firm will be rebranded to Coin Metrics Bletchley Indexes (CMBI). The freshly purchased firm after the relaunch "will utilize Coin Metrics on-chain and market-data expertise to expand the family of indexes to include such smart beta indexes based on key network metrics.”
Moreover, all of the Bletchley's indexes will be relaunched using Coin Metrics’ Network and market data. The first CMBI indexes are fixed to be the market capitalization weighted and cover the top crypto assets, based on some criteria.
Smart-beta index funds want to mix both active and passive strategies and we are getting more popular among the crypto fund providers. In common markets, investors can enter the market through active and passive vehicles. Passive Investing, made as per the likes of Warren Buffet and late Jack Bogle, focuses to get great exposure of the market, however active investing consists in selecting the individual stocks for outsized return.
Basically, the market has seen a great shift from active to passive, with hedge funds wanting about $15 billions of outflows in Q1 2019, as per the investment week. With smart beta strategies, index providers consist in some stocks (or cryptos) as per the non-market cap-metrics, which will then sit and confidently grow in the long-term.
Sources state that smart-beta strategies can be attractive to the emerging market like crypto. The variability of the market in which the coins are liable to jump up and die, make a great position around the strict market-cap to become less strong. Smart-beta exposure can help to remove the week players from the market.
Eric Evan, CEO of Blockforce said,
"In new emerging, inefficient asset classes, passive is not usually that effective, and active can work."