- Parameters begin contributing to the index only once they have met or exceeded their Threshold. When a parameter reaches this threshold, it is simply added to the index calculation – there is no rebalancing or normalization.
- Each month, the qualifying parameters are evaluated based on the percentage change from their first qualifying month. The resulting values are multiplied by the Weights, and then summed across all the parameters to calculate the index value (i.e., the weighted average growth)
- The default Weights were set based on estimates of the approximate significance of each underlying parameter to the overall state of the crypto industry.
- The default Thresholds were set based on these guiding principles:
- (1) There should be at least 6 months of data available.
- (2) The values should be at a level where the tracked parameter is reasonably relevant within the context of the broader crypto industry.
- Our default values represent just one view of the state of crypto. You can manipulate the weights and thresholds according to your preferences.
The State of Crypto Index is a tool that will likely evolve over time. We may add new parameters, alter existing ones, update historical data retroactively, and make changes to the methodology, data sources, and/or default values at our discretion.see disclosures