June Update: Huobi’s Index and ETF Monthly Performance
Huobi 10, the index being developed by the exchange’s Research and Development team, has been added to the Bloomberg Terminal, the leading financial data aggregator used by most financial institutions and professional investors.
As a reminder, Huobi released an index on May 22nd which includes 10 of the most highly liquid tokens listed on its exchange which are trading against USDT, and allows the index to be traded since June 11 through HB10, an exchange-traded fund (ETF). To be able to buy the ETF, you can do so easily by clicking here. In addition to the Huobi 10 index, the terminal will also see the inclusion of the trading data of 9 other cryptos: BTC, LTC, BCH, ETH, ETC, XRP, DASH, EOS, and ZEC.
Since we last spoke on Huobi’s index and ETF, its weight composition has changed, with HT being increased by 11% to reach 33.6%, BTC 23.36% (-2.64%), EOS 14.31% (-2.69%), and minor changes in the rest of the index. The fact that the weight of HT has increased is good news to us given the fact that we believe that the token has a lot of room to grow, as described in our Huobi Token Analysis: June Update, where we compared the volume to market capitalisation ratio of Huobi Token against Binance Coin (BNB) and Kucoin Shares (KCS).
The other underlying fundamentals of the index stayed the same as the ones we related to in our previous article, the index still includes the 10 most liquid assets available on Huobi, with high market values. The base point of the index is 1,000, and the weights will be rebalanced based on the transaction volume of the previous quarter.
In regards to its performance, despite having decreased by 5.96% since its launch, the Huobi 10 index has outperformed the cryptocurrency market and BTC by approximately 15%, thanks to the strong performance of Huobi Token which has increased by 14.65% over the analysed period. This demonstrates that the index’s aim – to allow for diversification, thus risk reduction through the removal of the asset-specific risk inherent in every investment – has been met.
Huobi launched the index on June 11th, you can find it here. As seen by the performance of the index in comparison to the cryptocurrency market as a whole, the diversification benefits ETF investing provides are clearly seen. First and foremost, the investment removes asset-specific risks, inherent in every investment. Secondly, ETFs remove the need for active portfolio management, and allow for human error reduction, with ETF’s having outperformed most mutual funds in other markets mainly due to the reduction of the error mentioned earlier as well as due to the reduced fees in comparison with active portfolio management.
Disclaimer: We are long HB10.