Zurich-based index provider Limeyard has introduced the Limeyard Crypto Asset Index, representing the performance of the broad crypto asset market.

The index excludes crypto assets enabling anonymity as well as those pegged to fiat currencies.

Whilst there are numerous crypto indices, regulators have to date refused approval of ETFs tracking crypto asset markets, citing low liquidity and the risk of fraudulent activities due to the lack of regulation in markets.

They have rejected several previous filings from a number of would-be providers, including VanEck, Evolve Funds, ProShares, and the well-known Winklevoss twins.

Launched in partnership with Decentriq, a fintech company helping financial institutions benefit from distributed ledger technology, the new index seeks to address these regulatory and compliance-related concerns.

The index universe is comprised of crypto assets (coins or token) traded on at least two out of 13 eligible exchanges. Crypto assets enabling anonymity are precluded, as well as those pegged to fiat currencies.

The index puts investability requirements at the centre of its construction. Only investable crypto assets with large liquidity and market capitalization trading on a list of major trusted exchanges are eligible. The index is composed of the largest 20 crypto assets passing these screenings. It is calculated both in US dollars and in bitcoin.

The index is market cap-weighted and is reviewed on a monthly basis. Over three-quarters of the index exposure is concentrated in the largest five crypto assets: bitcoin (28.8%), etherum (22.1%), ripple (11.8%), bitcoin-cash (9.0%), and eos (5.3%).

Patrick Valovic, founder and managing partner of Limeyard, commented, “Our team has built this index considering the needs of regulators, who have rejected some ETF proposals because their methodology was considered as too simplistic, and players could front run them. Excluding crypto assets which are enabling anonymity is also a way to ensure investors that any product based on this index will be compliant.”

Stefan Deml, founder and CTO of Decentriq, added, “We’re delighted to join forces with Limeyard, combining our knowledge of the crypto market and their decades of experience in the index business, to build the first index representing so well the nascent, yet growing crypto asset class.”