Crypto-Mid-Caps is fighting. While some digital asset investors can search for hidden gems and future powers at the next level of capitalization and market liquidity, that search has generally not been rewarded. In addition, the middle layers have delivered significantly greater volatility. Less reward, more risk. Is left over?
Is this a mirror of the domain of “Mag 7” in the actions, a lack of promising assets at the middle level or simply the future of finances take longer to bear fruit of what we thought earlier?
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We define our size segments using the COINDESK 20 and COINDESK 80. COINDESK 20. selected and liquidity in specific pairs. COINDESK 80 captures the next 80 assets outside of Coindesk 20, still reasonably large and still meditably liquid with less restrictions and allow more negotiation pairs. In other words, the medium-you.
Both indices have a base date of October 4, 2022 and a base value of 1000. From this letter, Coindesk 20 is around 3200. COINDESK 80 sits in 970. You read that right: the Cindensk 20 index has delivered a 320% yield since its base date, while the Coendesk 80 index has lost 3%.
The volatility of Coendesk 80 is well above that of Coindesk 20, although their patterns follow those of the other index and specialize Bitcoin and Ether.
What are these difficult digital assets in the medium capitalization segment? Badly conceived platforms? Frivolian projects? Not precisely. Although there are some highly volatile memecoras in the mixture (I am looking at you, PNUT), many components are known names.
If we limit our point of view on the performance of the year in which the current components (COINDESK 80 were reconstituted on January 31) we see that only a component is in the year, but many of the leaders (and lagging) are names that we have known For some time.
Of course, identifying the underlying cause of the low performance of the median capitalization is as difficult in cryptography as in other asset classes. Although size is one of the three classic Fame-Ferench factors (which suggests that small capitalization shares should overcome), it has not always been demonstrated in performance.
We suspect that while the cryptographic community will trade almost anything, it tends to invest In the biggest names, with more time and more familiar. Regulatory adaptations (eg, ETF) will also follow this pattern, which will lead to a broader set of investors.
Does this suggest that a inclination of great capitalization in the investment of digital assets, the inverse of the fame-francia size factor, will deliver excessive yields? We will see, but in the meantime, we can monitor the values of Coendesk 20 and Coindesk 80.
