About a month ago, we wrote a piece on the Cryptocurrency Net Market Cap. We discussed how the move of a singular coin, or a coins ALPHA, can cause the entire asset class to join in the rally or sell-off of that coin. Movement in spreads (the price of one coin underlying a second) can source very good trading opportunities if you are a long/short trader. As a long/short trader, you would want to be long one coin, and short another, for zero notional value, leaving you unexposed to the general movements of the entire asset class (BETA).
A macro-trader on the other hand, would not care about the individual movement in each coin (ALPHA). They would solely focus on the entire asset class, or the BETA, and this is where our morning report focus is today.
A great way to get exposure to the NET market cap of the digital asset space would be to trade an index. To go one step further, a great way to HEDGE a diverse portfolio would be to use Index Futures and Options. For example, in equities, one could trade S&P Index Futures or Options in order hedge the BETA exposure of their portfolio. We have been working closely with the folks at Crescent Crypto who have constructed the CCMIX. Below are the components of their index:
What we really like about this firm and this index is the availability to trade options on the CCMIX. For example, here are some June Calls that we are working with them:
CCMIX last price: $4,930
CCMIX M (6/28/19) $5,000 Calls 715/755
CCMIX M (6/28/19) $6,000 Calls 435/465
We see the ability to trade options on an index as a cleaner way to get exposure on the NET market Cap as either a SPECULATOR, or a HEDGER within the digital asset space. If you would like to get more information about the CCMIX or the Crescent team behind the index, please reach out and we would be happy to make the introduction.