Today, we’re releasing the alpha version of the Rad 30 Crypto Composite. Accordingly, we thought we’d sketch out the what, the why, and the how.
The What
The Rad 30 Crypto Composite (RAD 30) tracks thirty crypto assets, similar to how the S&P 500 and the NASDAQ Composite track stocks.
In a growing and snowballing crypto landscape, the Rad 30 will help anyone interested in the decentralized economy to broaden their perspective, prioritize their attention, and access a third benchmark for gauging the performance of the crypto market.
While correlation to Bitcoin and Ethereum across the crypto market is relatively high, in Q1 2018, the Rad 30 (which excludes BTC and ETH) moved in the opposite direction of BTC and ETH on 45% of days. (You can find our Quarterly Weighting Report here for more analysis of Q1.)
Q1 2018 Performance: RAD 30, BTC, ETH
The Why
Radicle is a disruption research company. We study and provide insights on the startups and technologies that are creating the future. It’s impossible to be in that business — or any business for that matter — and not have confronted the mega-themes of decentralization, blockchains, and crypto assets. Especially over the past ~24 months.
When contending with the topic of decentralization and crypto, in conversation with ourselves and our customers, we found ourselves asking many familiar questions:
- How do I know what to pay attention to?
- Which crypto assets are real and which are scams?
- Are there use cases for crypto outside of digital money and store of value?
- How big is the actual market opportunity for decentralized apps?
- What markets are most fertile for decentralization?
One challenge, in particular, felt like something that we could solve:
Show me a handful of real crypto assets that together and individually will help me make sense of decentralization and “crypto”. How is it progressing? What markets will it disrupt? How big of an opportunity is there for disruption?
The Rad 30 Crypto Composite will help address these questions. The Rad 30 consists of thirty crypto assets that are representative of the broader decentralized economy. These are not just the crypto assets with the largest market caps. These are crypto assets and platforms that are addressing opportunities for decentralization beyond digital money and store-of-value.
Why in the world should I care?
There are a number of reasons to care about the RAD 30. But we’ll keep it to three:
1. Broaden your perspective. There’s more to pay attention to than Bitcoin, Bitcoin copycats, and Ethereum. The top crypto assets by market cap present a very specific view of decentralization. They do not offer an understanding of how crypto is impacting the diverse set of industries in which it is being deployed and explored.
2. Prioritize your attention. Once you’ve decided to broaden your perspective, finding the crypto assets that matter will allow you to track substantive progress on a weekly, monthly, quarterly basis. Understanding what crypto assets are included (and why they’re included) in the RAD 30 will help business people of all types prioritize the attention they dedicate to decentralization and crypto.
3. A third benchmark. Use the Composite, its component sectors, and constituent crypto assets as benchmarks not only for each other but also for ETH and BTC. The Composite will be a lens for analyzing questions such as:
- What is the relationship between Ethereum and dApps built on top of it?
- How important is the success of the broader decentralized ecosystem to the success of Bitcoin?
These questions are only the tip of the iceberg. We see the potential for analysts to use the RAD 30 to build new formulas offering new analysis that benefits the crypto community. We believe that informed business people should understand how the decentralized economy is progressing, what markets are being disrupted by it, and where opportunity for further disruption lies. To that end, just as the stock market has the S&P 500, the Dow Jones Industrial Average, and the NASDAQ Composite, we want the decentralized economy to have the Rad 30 Crypto Composite.
The How
There are more than 30 crypto assets out there. So, how then did we go about choosing the RAD 30?
In a space where there were 159 ICOs in Q1 2018 alone, it’s impractical to analyze every emergent crypto platform and asses its viability and potential. So, instead of being reactive to every new crypto asset, one ought to be proactive and seek to identify the best opportunities.
To solve this, rather than starting with specific crypto assets, we take a broader approach, asking questions from a sector lens. Which sectors are the most susceptible to decentralization? Of those sectors, which present the largest market opportunities?
Then we ask ourselves: how do the crypto assets in these sector compare in terms of incentive structures and current trading levels? Our combined bottoms-up and top-down approach enables us to prioritize certain crypto assets and sectors over others.
Each crypto asset is then weighted according to a combined fundamental and quantitative analysis. Similar to the S&P 500, the RAD 30 is finally calculated as the aggregate score of the weighted thirty crypto assets.
We believe the RAD 30 has the potential to bring a little bit of structure to a structureless market. We’re excited to see what can come out of the RAD 30!
Find out more about the Rad 30 Crypto Composite here!
April 2018 Indexed Performance: RAD 30, BTC, ETH
Update: April’s Performance
Over the course of April, the RAD 30 was up 93.7% while BTC and ETH were up 32.5% and ~69%, respectively. Decentralized social media platforms and decentralized cloud computing were the two best performing sectors, both up 146% and 139%, respectively.
If you’d like to access our RAD 30 data, please email analyst@rad.report.
Radicle is a category-defining research and information company built on understanding startups and new technologies. Rad.Crypto is Radicle’s crypto research arm.
Disclaimer: Radicle is not an investment advisor, and Radicle makes no representation regarding the advisability of investing in any security, asset, token, fund or other investment vehicle. Radicle is not a tax advisor. Inclusion of a security, asset or token within a Radicle composite or any Radicle analysis is not a recommendation by Radicle to buy, sell, or hold such security, nor is it considered to be investment advice. Past performance of a composite is not an indication or guarantee of future results. All Radicle materials have been prepared solely for informational purposes based upon information generally available to the public and from sources believed to be reliable. The composite data and analysis shown do not represent the results of actual trading of investable assets/securities. Radicle maintains the composite(s) and calculates the composite levels and performance shown or discussed, but does not manage actual assets.