The crypto volatility index is one of the leading financial products for investment in cryptocurrencies in the financial market. Here we explain what it consists of.
When it comes to trading, those who are foreign to this world usually think of buying and selling stocks. In the financial market, the index is set by the 500 companies on the S&P list. On the other hand, in the crypto world, a group of cryptocurrencies called Crypto 10 index has the same function. This means that the value of your investment varies according to the behavior of that group of assets. They achieve this by using a pre-established criteria.
Therefore, these indexes end up fulfilling a double function within the economy. Firstly, they serve as an indicator of the state of the market sector. They show if it is generally behaving positively or negatively. And secondly, they serve as an investment instrument. That means that traders can minimize risks and obtain profits from the performance of a basket of assets.
Thus, it is clear that investing in stock indexes can turn out to be a very smart move. Especially when it comes to the crypto market. In most cases, the biggest gains are for those who decide to take advantage of financial products. For example, futures contracts, derivatives, or indexes.
This makes the Crypto Volatility Index, or Crypto Index 10, one of the main options to invest in the market. This was created to measure the performance of the top 10 cryptocurrencies by their market capitalization. This includes the price of Bitcoin, Bitcoin Cash, Ethereum, Ripple, EOS, Litecoin, Monero, Cardano, IOTA, and Dash.
The main products in which you can invest include stocks and bonds, currencies and cryptocurrencies, futures contracts and indexes, such as the Crypto Volatility Index or Crypto 10.
Indexes in the crypto world and beyond
If we are even moderately interested about what is happening in this world, terms such as the “S&P 500 Index” or “Dow Jones Index” have likely slipped into our vocabulary. These are ways of gauging about what is happening in the New York Stock Exchange and the American financial market.
But, what is an index? In layman’s terms, an index is a financial product that measures the performance of a set of assets. Therefore, you can invest in an index as if you were investing in a company. When you do that, your money is distributed among all the assets which that index comprises.
In this way, the stability of the crypto volatility index depends at the same time on several cryptocurrencies. This minimizes the possibility of steep losses for those traders who decide to invest their capital in an index. To achieve this, they distribute the risk among all these crypto-assets, instead of concentrating it on one.
Investing in this index is an extremely simple process. This is possible thanks to the facilities offered by Plus500, one of the main crypto market brokers. With this service, you can invest in this index quickly and safely.