Factor research and index solutions firm IDX Insights has launched the first smart beta cryptocurrency index in response to investor demand.
The IDX Crypto Opportunity index (COIN) is available on SMArtX Advisory Solutions’ managed accounts platform.
COIN is designed to allocate between cryptocurrencies and fixed income ETFs by exploiting short-term momentum.
It looks to provide an allocation option for investors who are looking to use factors to extract performance from a traditionally very volatile asset class.
Ben McMillan, founding partner and CIO of IDX Insights, commented: “While several long-only crypto-currency indexes exist, there were none that took a tactical approach to deploying risk-capital when the risk/return profiles look most favourable.
“Nascent asset classes often provide an opportunity for substantial returns but come with elevated volatility and considerable drawdowns; bitcoin (and the other cryptocurrencies) have been no different.
“We have seen increased investor interest in the space but believe that a long-only approach simply does not make sense for most investors.”
The move comes a day after the Securities and Exchange Commission (SEC) delayed its decision on three bitcoin ETFs to later this year.