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LAST FEW HOURS TO GO! 108 Token Rebalancing

LAST FEW HOURS to go till 108 Token Sale Phase I ends. Buy your tokens now.

108 Token is an ETF-style token that represents a basket of the top 15 cryptocurrencies. It works as an index which tracks the price movements of the underlying basket of cryptocurrencies, depending on their supply-adjusted market capitalization.

In this post we expound on the allocation of funds during rebalancing and how the 20% weight cap on index constituents paves way for a diversified portfolio of ‘top 15 cryptocurrencies'. To illustrate further, we will use the following case as an example to elaborate on our rebalancing strategy.

Let’s start with a nominal amount of $1 million. A general index fund tracking the top 15 cryptocurrencies would allocate the funds in proportion to the currencies’ market capitalizations. For example, if Bitcoin’s market cap accounts for 50% of the top 15’s market cap, then $500k is invested in Bitcoin; if Ethereum’s market cap accounts for 15%, then $150k goes into Ethereum, so on and so forth. Based on the aforementioned investing strategy, the weights of the top 15 cryptocurrencies in the index portfolio would be, as of Aug 28th, like this:


Note: We excluded DCN and TRX from the top 15 and replaced them with XMR and NEO

If we impose a 20% cap on each index constituent, then we can allocate a maximum of $200k to Bitcoin, even though it’s market share is ~48%. The remaining $800k is allocated to the rest of the currencies in proportion to their market caps again. Ethereum’s market cap is roughly equal to 27% in the remaining 14 cryptocurrencies. So, we allocate 27% of the $800k to Ethereum, which translates to 21.51% of the $1 million, which is greater than 20% again. So, we trim down Ethereum’s allocation to $200k and start allocating the remaining $600k to the remaining 13 currencies. We repeat this process until one of the highest-valued currency’s, excluding the capped ones, allocation drops below 20%. The final portfolio in the above example would be:


Note: We excluded DCN and TRX from the top 15 and replaced them with XMR and NEO

Market Update

After a strong bull run earlier this week, crypto markets are down across the board with all of the top 10 cryptocurrencies recording losses. BTC is back to the sub-$7,000 territory after losing 2.74% of its value to price at $6,885. Ethereum, at $277.08, is down 5.67%. The greatest losses were seen in Dash, which lost 8.83%.
Data sourced from OnChainFX.com.

Crypto Tweet of the Day



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BTC vs 108 Token Historical Performance