Investors are likely familiar with popular stock market indexes such as the S&P 500 and the Dow Jones Industrial Average. These indexes allow investors to measure the performance of the stock market by tracking a collection of stocks that often share certain characteristics.
In November 2024, crypto exchange Coinbase aimed to provide something similar for the crypto industry by launching the Coinbase 50 Index (COIN50). Here’s what you should know about the nascent crypto index, including what tokens are in it.
What is the Coinbase 50 Index (COIN50)?
The Coinbase 50 Index is an index made up of the top 50 digital assets on the Coinbase exchange that meet the index’s criteria to be included. The index can be used to track the overall trend of the crypto market, and eligible traders can trade the index using COIN50 perpetual future (COIN50-PERP) on Coinbase International Exchange and Coinbase Advanced.
The Coinbase 50 Index is market-cap weighted and will be rebalanced on a quarterly basis. Crypto investors and traders can use the index to benchmark their performance, similar to the way stock investors measure their performance against the S&P 500.
Coinbase says the index currently covers about 80 percent of the total crypto market cap and it plans to launch a broader index as the crypto market matures.
“I think we’re eventually going to get to a world where there’s millions of these tokens,” Coinbase CEO Brian Armstrong told CNBC in an interview. “Every project, every individual, every meme on the internet is going to have one of these.”
“Increasingly, people are going to want broad market exposure to crypto,” Armstrong said.
What’s included in the Coinbase 50 Index?
The Coinbase 50 Index includes the top 50 digital assets on the Coinbase exchange that meet the requirements for inclusion. Here are the top constituents as of November 2024.
Coinbase 50 Index top components
|
Digital asset |
Index weighting |
|---|---|
|
Bitcoin (BTC) |
51.26 percent |
|
Ethereum (ETH) |
26.35 percent |
|
Solana (SOL) |
6.91 percent |
|
Dogecoin (DOGE) |
3.06 percent |
|
XRP (XRP) |
2.25 percent |
|
Cardano (ADA) |
1.46 percent |
Source: MarketVector Indexes
You’ll notice that the top six index components account for 91.3 percent of the total index, which makes it highly concentrated. By comparison, the top 10 holdings in the S&P 500 make up about 35 percent of its value.
Bitcoin alone accounts for just over half of the index’s value, but that’s not far off from its share of the global crypto market cap, according to CoinMarketCap. As of November 2024, the global crypto market cap stood at about $2.95 trillion, while Bitcoin’s market cap was roughly $1.75 trillion, or about 59 percent of the global figure.
The index caps a component’s weighting at 50 percent, but weightings are only reviewed quarterly. The excess weight above 50 percent is redistributed to the other index components during the rebalancing process.
Coinbase 50 Index performance
Coinbase listed the following performance data when it launched the index on Nov. 12, 2024.
|
Time period |
Coinbase 50 annualized performance |
|---|---|
|
1 month |
37.18 percent |
|
1 year |
97.65 percent |
|
3 years |
-3.90 percent |
|
5 years |
– |
|
7 years |
40.88 percent |
Note: Coinbase did not provide five-year performance data.
Bottom line
Coinbase launched the Coinbase 50 Index to give investors and traders a way to benchmark their returns and track overall trends in the crypto market. The index includes the top 50 digital assets on the Coinbase exchange that meet the index’s criteria. Coinbase 50 is highly concentrated, with its top six components accounting for more than 90 percent of the index as of November 2024.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.