Bitcoin 2.0: Seeking Alpha

New Index Helps Investors Navigate the Crypto Seasons

A new index has been launched to help investors navigate the bitcoin market and gain exposure to the asset beyond beta.

The AMINA CoinDesk BTC Momentum Index (Ticker: BTIAMINA) was created by AMINA Group and CoinDesk Indices and aims to provide dynamic exposure to bitcoin by shifting to cash (USD) when price trends are unfavorable.

The index is designed to capture the upside potential of bitcoin while mitigating downside risk during periods of market turbulence.

BTIAMINA measures the performance of a strategy that dynamically allocates between exposure to bitcoin and cash based on the CoinDesk Bitcoin Trend Indicator (BTI), a quantitative signal which conveys the presence, direction, and strength of the trend in the price of bitcoin using a purpose-built algorithm.

The strategy aims to shift to cash when the BTI signal strength is weak or negative, and to increase exposure to bitcoin when the signal strength is strong and positive.

The index is rebalanced monthly and aims to provide a smoother ride for investors compared to direct bitcoin exposure.

The chart below showcases a BTIAMINA backtest against the CoinDesk Bitcoin Price Index (XBX) from 1/1/2018 to 6/27/2024.

Key features of the AMINA CoinDesk BTC Momentum Index include:

Exposure to bitcoin price trends: The index is designed to provide dynamic exposure to bitcoin price trends, shifting to cash during periods of unfavorable price momentum.

Quantitative BTI signal: The index utilizes the CoinDesk Bitcoin Trend Indicator (BTI) to derive a quantitative signal on bitcoin price trends.

Regular rebalancing: The index is rebalanced on a monthly basis to adjust the exposure to bitcoin and cash.

Potential for enhanced risk-adjusted returns: By shifting to cash during periods of weak or negative price trends, the index aims to enhance risk-adjusted returns over the long term.

Reduced psychological barriers: The index may serve as a valuable tool for investors who may face psychological hurdles in directly investing in bitcoin.

Commenting on the launch, Gregory Mall, Head of Investment Products & Solutions at AMINA Bank, said: “Partnering with industry leader CoinDesk Indices to launch the BTIAMINA is a landmark development for the broader crypto investment community. This index is a testament to our commitment to innovation and excellence in the digital asset space. We are providing professional investors with a sophisticated tool to navigate the complexities of the bitcoin market with greater confidence and precision. The BTIAMINA Index not only aims to enhance risk-adjusted returns but also reduces the psychological hurdles associated with direct bitcoin investments.”

For more details on the BTIAMINA Index visit the website.

This article was written by CoinDesk Indices and is not associated with CoinDesk editorial.

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