Crypto Briefing’s CB10 Index Rebalances to BTC, ETH

Key Takeaways

  • Bitcoin and Ethereum were CB10’s top gainers last month.
  • The rebalancing for August saw only small changes in token allocation percentages with no new additions.
  • Dogecoin was the biggest loser of the index as the meme crypto dropped by 18.1% in July.

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Crypto Briefing’s crypto market index CB10 has made additional room for Bitcoin and Ethereum during the rebalancing for August.

CB10 Index Records Gains 

Crypto Briefing’s CB10 index jumped in July with the help of the two leading cryptocurrencies.

The CB10 index is an experiment composed of the top ten cryptocurrencies traded on top U.S. exchanges and weighted by market capitalization. The technique is similar to the S&P 500 and NASDAQ 100 index. 

CB10 has gained 17.3% since the last rebalancing event on Jul. 1. Bitcoin and Ethereum’s overall gains during the same period were 19.5% and 22.1% respectively.

cb10, bitcoin, ethereum annual chart
CB10 (black), Bitcoin (orange), Ethereum (blue) annual price performance

The index’s performance has benefited from higher gains than BTC in the first six months to continue outperforming Bitcoin’s year-to-date gains of 31%. ETH leads with 250% gains, while CB10 has returned 50% gains since its formation on Jan. 5. Dogecoin and Cardano’s ADA token were the CB10’s biggest losers last month.

Crypto’s Latest Market Trends 

The crypto market showed its first signs of recovery after the recent crash in May, with Bitcoin rising to $40,000. Ethereum benefited from this uptrend as the imminent EIP-1559 update added to the bullish sentiments. 

If Bitcoin consolidates above the $42,000 resistance or Ethereum breaks $3,000, the market can expect the capital to flow towards other cryptocurrencies. 

While the trading volumes are starting to pick up for other cryptocurrencies, the flow to smaller market capitalization tokens is restricted as BTC is yet to re-establish a strong bullish narrative. Traders are showing reluctance in the bullish stance. They fear that the recent push to $40,000 could be a dead-cat bounce or bullish correction in a long-term negative trend, suggesting that the bottom could be below $29,000.

Crypto briefing CB10
Crypto Briefing’s experimental $1000 portfolio snapshot before rebalancing

DOGE’s poor performance in the CB10 index can be attributed to the cooldown in bullish euphoria after Elon Musk stopped tweeting about the coin. The values of other cryptocurrencies excluding DOGE and ADA increased in near lock-step with Bitcoin and Ethereum.

The crypto market is looking for a definitive direction as cryptocurrencies below ETH nervously follow the top two.

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CB10 Rebalances for August

The reconstitution of Crypto Briefing’s experimental $1,000 portfolio in CB10 was carried out at 10 am on Jul. 2, 2021.

Its composition for August saw no change in the cryptocurrencies from July’s top ten list. However, there were minor percentage changes and consequent ranking adjustments. 

Bitcoin and Ethereum ate the most from other tokens’ shares, adding 1.92% to their allocations. Ethereum, once again, constitutes more than one-fourth of the index’s distribution. 

The change in almost all other cryptocurrencies was negative, nonetheless, with a small magnitude of less than 1%. Furthermore, Uniswap changed positions with Bitcoin Cash to take the sixth spot, as Chainlink replaced Solana at number nine with small percentage changes.

cb10 relabalancing
CB10 Rebalancing on Aug. 2

This month’s CB10 rebalancing can be carried out rather easily by allowing for small errors in the calculation. Instead of reallocating all tokens, a change in the top five tokens alone could do the trick. Investors can sell the top tokens for a stablecoin, Bitcoin, or Ethereum pair and then rebuy according to the new percentages.

Some may also choose to book a part of their profit before reinvesting for the next month. For experimental purposes, Crypto Briefing will continue to compound the returns every month.

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Crypto Briefing’s CB10 Index Outpaces BTC in Q1, Q2

Key Takeaways

  • The sixth rebalancing of Crypto Briefing’s CB10 was carried out at 10:00 EST on Jul. 1.
  • Bitcoin was the only cryptocurrency to see a positive allocation during this month’s rebalancing.
  • Solana replaced Polygon in the top ten index.

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The half-yearly gains of Crypto Briefing’s CB10 index have outperformed Bitcoin despite the market’s negative trend in the last two months. 

CB10’s Performance in the Crypto Market 

Crypto Briefing’s experimental index of the top ten cryptocurrencies by market capitalization has closed in the red for a second consecutive month. The six-month gain of the index is 27.7%—2.7 times higher than Bitcoin. 

BTC has yielded only 10% so far since the inception of the CB10 Index in January. Ethereum’s gains continue to surpass Bitcoin and CB10 at 102.2%.

The CB10 crypto market index implements the S&P 500’s strategy of investing in top 500 stocks based on percentage weight distribution by market capitalization. It is formed of the top ten tokens by market capitalization (according to CoinGecko) that are available to trade on U.S.-based exchanges. The index is rebalanced on a monthly basis. 

By June end, the earnings from a $1,000 portfolio in CB10 invested at the beginning of this year stood at $277, down from $489 last month. 

crypto briefing cb10
Source: Crypto Briefing

With a total percentage share of 84.5%, Bitcoin and Ethereum were the top performers of the index last month. Chainlink and Polygon were the top losers, with more than 40% downside move. The net loss in June was 14.2%.

Rebalancing for Second Half of 2021

The rebalancing for the month of July saw some reshuffling between the percentage weights of the existing cryptocurrencies. The number of cryptocurrencies with less than 1% allocation has increased from one to five since last month. Ethereum’s share saw the biggest drop of all at -1.56%. Together, Bitcoin and Ethereum now command 86.57%.

Apart from that, Solana replaced Polygon, placing ninth on the index with a 0.9% share. 

Dogecoin’s price failed to revive despite positive engagement from Elon Musk. DOGE fell one place from position three to four during this month’s redistribution. Cardano is now the third-largest cryptocurrency of the index. 

cb10 crypto briefing index
Source: Crypto Briefing

The market capitalization of CB10’s last five tokens is in a tight range of around $7.5-9.5 billion. These cryptocurrencies—Bitcoin Cash, Uniswap, Litecoin, Solana, and Chainlink—could witness multiple ranking changes over the course of this month. Moreover, an evenly balanced portfolio across these assets provides a better risk: reward ratio than investing in one alone.

Crypto Briefing readers who copy CB10 may choose to realize their half-yearly gains and reinvest the original amount for the next half of the year. The process of rebalancing and compounding options is outlined in the first distribution schedule after the January launch.

Visible Market Trends

One of the clearest trends in June was the rising dominance of Bitcoin. Last month, Bitcoin’s price dropped by 10% whereas, the price of all other cryptocurrencies in the index slumped between 20% to 50%.  This inflow from the lower cap tokens to Bitcoin is characteristic of a bear trend when investors seek refuge in a comparatively less volatile asset. 

While Ethereum benefits from higher gains than Bitcoin from earlier this year, its percent weight in the index dropped by 1.5%, following a negative month. The ETH:BTC ratio dropped by 4% in June. ETH struggled to break above the resistance at 0.065 BTC, with support at 0.055 BTC. 

ethereum bitcoin cb10
Source: TradingView

In the DeFi spectrum, the total liquidity of the pool and the price of governance tokens continue to feel the pressure of the market.

Bitcoin’s price rose up to $40,000 and Ethereum surpassed $2,800 for a short period in the first half of the month. However, the market continued to face hurdles, particularly from global regulatory oversight. The effects of China’s severe crackdown were visible across the market with a near 50% hashrate decline in Bitcoin’s mining network. The largest crypto exchange in the world, Binance, currently faces legal troubles in multiple countries.

Positive adoption of these blockchain projects seems to be the only way out of this downtrend.

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Crypto Briefing’s CB10 Index Rebalances After May Crash

Key Takeaways

  • The June rebalancing of Crypto Briefing’s CB10 was performed at 10:00 AM EST on Jun. 1.
  • Cardano, Dogecoin and Ethereum were the top performers of the index last month.
  • Polygon’s MATIC replaced Solana with a 0.99% allocation.

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Crypto Briefing’s CB10 index of the top ten cryptocurrencies weighted by market capitalization yielded a negative return of 27.6% in May. 

CB10 May Performance 

Crypto Briefing’s CB10 index steered through the turbulent May period with higher gains than Bitcoin. While Bitcoin registered a monthly loss of 35.5%, CB10 dipped 27.6%.

The index borrows from the principles of the S&P 500 to distribute funds based on their market capitalization. The distribution enables lower volatility for CB10 and an improved risk return ratio. 

Cardano’s native token ADA was the top performer among CB10 tokens last month. While most tokens ended May in red, ADA’s monthly gain was 28.5%. The anticipation of an upgrade to bring smart contracts to Cardano fared well for its price. 

DOGE and ETH contained their monthly losses at 6.5% and 10.5% respectively. On-chain statistics, the strengthening DeFi narrative, and growing institutional interest have all fueled overwhelmingly bullish sentiments for ETH in recent months. 

Moreover, the community engagement around Dogecoin has been highly active, helped in part by Elon Musk’s promises of improving the source code and occasional promotional tweets. DOGE was among the top performers during last month’s crash. 

The monthly losses in Bitcoin and many other cryptocurrencies were greater than 30%.

Source: TradingView

Bitcoin Dominance Slides

The most notable trend in May was the strong correction in crypto markets, commencing May 12. In addition to the Bitcoin dip, many DeFi tokens and lower cap coins suffered losses of 50% or more after the market crashed on May 19.  

Bitcoin’s market cap dominance slid below 50% for the first time since 2018. On May 19, there was a brief surge in dominance. Nevertheless, the rotation back to Bitcoin was limited following the crash. Currently, BTC holds 40.2% of crypto’s $1.73 trillion market cap. 

Ethereum’s share of the crypto market increased to 18.1% with a total market value of $313 billion.  

Source: Crypto Briefing

The Rebalancing 

The portfolio rebalancing was performed at 10:00 EST on Jun. 1, 2021. 

The composition of the index changed primarily for the top four cryptocurrencies. Once again, Ethereum took a significant portion of Bitcoin’s share in the index. 

Bitcoin’s percentage weight dropped from 64.69% to 58.52%, while ETH, DOGE, and ADA saw increased allocations of 3.98%, 0.41%, and 2.08% respectively.

Polygon’s MATIC made its debut entry in the CB10 index, replacing SOL at the tenth position. Its share at the time of rebalancing the index was 0.99%. 

cb10 image
Source: Google Sheets

Investors can sell their tokens for a stablecoin or Bitcoin and buy back newly allocated amounts to rebalance the index. The details of the process are listed in the first portfolio rebalancing in February.

Last but not least, it’s worth noting that the compounded strategy may not appeal to all readers.

Indices based on strategies like distribution by market capitalization or segments are effective mediums for passive investors. They improve the risk return ratio by diversification. However, the investors must also have an exit strategy for their investments. They can choose between booking profits every month (or even the quarter), or continue compounding the gains.

For instance, if investors who had started with $1,000 took their gains during the monthly rebalancing, they would have added $800 in the first four months. Accounting for last month’s 27.5% loss, the total profit in five months comes to $525. The compounded return figure is $493. Thus, while compounding yields superior returns during positive trends, it might not be suitable for volatile markets. For experimental purposes, Crypto Briefing will continue to follow the compounded strategy.

Find live portfolio stats here.

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Crypto Briefing’s CB10 Index Sees Large Rebalance to ETH, DOGE

Key Takeaways

  • Crypto Briefing’s CB10 index has doubled in value since it was created in January.
  • Ethereum was the top gainer in the index, enjoying 63% monthly returns this month.
  • Dogecoin and Solana entered the index replacing Filecoin and Stellar.

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Crypto Briefing’s CB10 index of the top ten cryptocurrencies weighted by market capitalization has continued to outpace Bitcoin in this bull run. 

The index’s monthly reconstitution was performed at 10 am on May 3, 2021. 

CB10 April Performance 

CB10’s return for April stood at 11% at the time of reconstitution. The annual compounded return of CB10 is 100.7%, while the sum of individual monthly gains is 82%.  

The biggest winner of the index in April was Ethereum’s native token. ETH gained 63% since the last rebalancing schedule. At the same time, Bitcoin’s price is nearly at par, around $55,000. 

CB10 $1000 experimental portfolio tracker. Source: Google Sheets

Filecoin was the biggest loser, down 15% from Apr. 5, as the token failed to maintain the bullish moment after a 10x rise to the peak of $237. 

Steller also failed to draw the buyer’s attention last month due to a lack of DeFi adoption on the platform. 

Crypto Market Trends 

Bitcoin’s dominance fell below 50% for the first time in three years. Ethereum and Dogecoin took the most from Bitcoin’s share of the crypto market. 

Dogecoin’s pump exhibited clear signs of a retail hype. DOGE made a new all-time high of 70 cents with a total market capitalization of $90 billion. 

The 30-day average search volume on Google for Bitcoin (blue), Ethereum (red), and Dogecoin (yellow). Source: Google Trends

The extravagant rise of the high-inflationary meme coin does sound alarm bells of a bubble. However, the GameStop incident is still fresh, which reminds the market not to underestimate the power of a retail mania. 

The pump in Dogecoin also caused an increase in cryptocurrencies traded on Robinhood. The American online brokerage firm has listed five tokens besides DOGE: Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ethereum Classic. 

The strength in ETH, on the other hand, is driven by consistent demand. 

As the price of ETH continued to rise, the network contributors have finally been able to reduce the average price to 45 Gwei from a much higher range of 150-200 Gwei. The Berlin hard fork and increased adoption of Layer-2 has improved the apparent gas limit of the network. 

Glassnode Ethereum-cover
ETH price and Gas price in Gwei. Source: Glassnode

While an ETH transaction still costs around $30, users have continued to use the network at its maximum capacity. Moreover, the supply of ETH in smart contracts is consistent at around 22%. 

Rebalancing Stats for May 2021

The rebalancing event on May 3 saw a 9.5% decrease in CB10’s Bitcoin allocation. Solana’s SOL token and Dogecoin replaced Filecoin’s FILE and Stellar’s XLM on rebalancing. 

Uniswap, Litecoin, Bitcoin Cash, and Chainlink saw positive gains in allocations, as DOT’s allocation dropped by 0.4%. 

The massive pump of 1,000% in Dogecoin in April pushed the meme-coin to the fourth position on CoinGecko in terms of total market capitalization, outpacing Tether’s USDT and XRP. 

DOGE was already trading on Robinhood, a top online brokerage in America. The token’s listing on Gemini has made the token easily available for U.S. investors, making it the third-largest cryptocurrency in the CB10 index. 

CB10 live distribution and monthly rebalancing stats. Source: Google Sheets

The exclusion of BNB from the index due to non-availability on American exchanges has robbed CB10 of the opportunity to capture the DeFi craze on Binance Smart Chain (BSC). 

The price gains in tokens of other competing Layer-1 networks, Cardano and Polkadot, were comparatively lower than ETH and Binance Coin. The new inclusion of Solana in CB10 will look to compensate for the loss in BNB. 

The method of performing the rebalancing was shared in the first schedule in February. Investors can opt to book monthly gains or reinvest the proceeds for the compounding effect. 

CB10’s hypothetical portfolio follows a compounding strategy. 

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Bitcoin (BTC) $ 27,597.39 1.59%
Ethereum (ETH) $ 1,666.56 3.32%
Litecoin (LTC) $ 66.36 1.91%
Bitcoin Cash (BCH) $ 242.78 0.19%