This Index of Ethereum-Based Tokens Has Outperformed Bitcoin This YearBy Kyle Torpey
Bitcoin’s increased dominance over the crypto asset market has been the talk of Crypto Twitter for the past few weeks. The Bitcoin Dominance Index (BDI), which measures bitcoin’s market cap as a percentage of the overall crypto asset market cap, has increased from 53% to 58% over the past six weeks (though there are reasons as to why this metric should be thrown out altogether), and 127 out of 165 cryptocurrencies have had negative returns during Bitcoin’s price increase over the past month.
Ripple (XRP), which was one of the darlings of the 2017 crypto asset bubble, is already down around 50% against Bitcoin (BTC) this year, and the world’s second largest crypto asset Ethereum (ETH) is down nearly 14%.
But the tokens built on top of Ethereum have fared quite a bit better. While some have been cheering on Bitcoin’s dominance and the fall of the altcoin market, one index of Ethereum-based tokens has been on the rise. In fact, it has outperformed BTC so far this year.
The Bletchley Ethereum Token Index
Bletchley creates indexes based on the type of exposure investors wish to gain to the crypto asset market. They have indexes for the top 10, 20, and 40 assets on the market, indexes focused on specific use cases or classifications, and more.
The Bletchley Ethereum Token Index (BETI) can be used by investors as a guideline for their allocation to tokens launched on top of the Ethereum blockchain. To clarify, ETH is not included in the index. All of the assets tracked by Bletchley that are ERC-20 tokens are included in the index. This a weighted index, meaning the tokens with the larger market caps take up a larger percentage of the index, and it is rebalanced at the end of every month.
Tron (TRX) and Binance Coin (BNB) together currently make up more than half of the BETI’s weighted index, so the movements of those two coins have a huge impact on the profitability of the Ethereum token tracker.
BNB in particular has done very well this year, rising from under $6 to over $30. Other key performers have been TRX, which is up over 40% against the U.S. dollar year-to-date, and Basic Attention Token (BAT), which is up 175% on the year and a current wait of just over 6% of the index. When measured in BTC, the BETI is up 13.4% this year.
While it’s clear Ethereum became the platform of choice for launching new tokens over the past few years, it should be noted that the BETI’s two most important tokens, BNB and TRX, have launched their own blockchains at this point. To gain the functionality of these coins, users must move to the new, native blockchains, which calls into question why these assets are still tracked in this index.
On top of that, Binance Chain and Tron are direct competitors to Ethereum in terms of their usefulness as smart-contracting platforms and decentralized exchanges.
So it’s possible that the relative success of the BETI this year was simply caused by a situation where Ethereum was the preferred platform for launching new tokens at a specific point in time. When looking at the Bletchley Ethereum Token Even Index, which weighs all of the ERC-20 tokens evenly, the Ethereum tokens are actually down nearly 16% against BTC this year.
That said, despite all the recent discussions of Bitcoin dominance, this particular index of tokens has outperformed Bitcoin so far this year.