Passive and Active Crypto Indices
Risk-controlled crypto enhancements for traditional portfolios
Aim of this concept paper is to develop an investable cryptocurrency index family, which allows investors to easily add either a passive or an active (risk-controlled) cryptocurrency exposure to their existing portfolios.
Whereas the passive (capital weighted) indices can be replicated easily, the active indices require a robust and efficient risk management methodology to function properly.
Main advantage of the active risk control is that major losses during downside phases can be limited and overall volatility reduced.
Via physical replication of the passive and active indices (e. g. with crypto ETCs), investors can get a cost-efficient and secure exposure to the crypto universe.