Platform Will Track History, Market Trends to Improve User Experience
SharesPost, a top provider of liquidity solutions for the private growth asset class, has launched its own SharesPost Token Index.
The new index is meant to improve the tracking of the token market’s growth. The index concentrates on a set group of tokens that use the ERC-20 protocol, using factors like trading history and market capitalization to assign each token a unique weight based on supply in circulation and current price. Consequently, the token index can indicate the market’s maturity in real-time, simultaneously lowering transaction costs and liquidity risk. These qualities make the SharesPost Token Index the first of its kind in the industry.
SharesPost, a FINRA-registered broker-dealer and SEC-registered Alternative Trading System, launched the industry’s first online secondary market for private technology shares in 2009. Since its launch, SharesPost has facilitated more than $4 billion in shares transactions of more than 200 technology companies. SharesPost’s platform now allows clients to access private market and liquidity solutions, such as data on leading private technology companies, SharesPost’s Private Growth Index, and the SharesPost100 Fund, which provides investors easy access to the asset class. SharesPost Lending allows private company shareholders to borrow against their company shares. In addition, SharesPost launched its first initial coin offering in 2017.
“As interest in cryptocurrencies and blockchain continues to rise, we saw a need to provide a meaningful measure of token performance to help inform investor decisions and make the market more comprehensible for everyday people,” says Gregory Brogger, CEO and founder of SharesPost, in a press release. “Our resulting growth Index addresses this need, while reflecting our larger mission of providing liquidity to the private growth asset class through trading, asset management, research, and data.”
The token index employs a market capitalization formula to determine total value that is based on daily pricing data. The index uses the volume-weighted average price of tokens from a whitelist of exchanges. SharesPost chose the specific tokens for its index because they represent the broader blockchain sector, have specifically defined utility, and are sourced in reliable projects. This means that SharesPost excludes from its index any tokens pegged to one particular currency or asset.
SharesPost uses July 1 of 2018 as its baseline to review the token index’s performance back to the third quarter of 2017. This allows SharesPost to compare its data to Ethereum and Bitcoin prices. While short-term volatility has been the leading story in the token market as of late, crypto assets offer opportunities for long-term investments. The token index has increased 17 percent since October of last year as Bitcoin has increased by 59 percent and Ethereum has dropped 17 percent.
“As more institutions continue to dive into the crypto world, a consistent and comprehensive tool for analyzing tokens is integral to effectively evaluate and interpret the market,” said SharesPost Head of Research Rohit Kulkarni in a press release. “Our mission is for the SharesPost Token Index to be that tool, providing much-needed clarity to a nascent and ever-evolving industry.”
The SharesPost Token Index can be viewed here.