Join Evan Rapoport, Founder and CEO of SMArtX Advisory Solutions as he is joined by Ben McMillan, Founder and CIO of IDX Insights, winner of the SMArtX 2022 Virtual Award for Direct Index of the Year.
IDX’s Crypto Opportunity Index is an actively traded strategy using the Bitcoin Greyscale Trust. Their systems quantitatively assess the market and indicate a risk on (buy Bitcoin) or risk off (go to cash/Treasuries) that has historically outperformed the price of Bitcoin significantly with lower standard deviation. It is designed to mitigate the risk of accessing Bitcoin, limit downside exposure, and therefore compound out higher over time. This is particularly well facilitated by SMArtX’s ability to trade all day, every day to effectively execute IDX’s investment strategy.
IDX is an entirely evidence based and systematic rules-based trading strategy, with no discretion over the trading. It is momentum-based that doesn’t just look at the ups and downs, but also the path of the momentum to provide a second layer, which confers substantial predictive power.
Crypto as an asset class is the headlining digital currency that has been adopted across the globe by individuals, institutions, private companies, and governments. It has become an important alternative to government-issued currencies as we have recently seen bank accounts shut down in times of conflict (Ukraine) and other government interventions (Canada).
To learn more about the Crypto Index and the Blockchain in general that is already permeating all aspects of our lives to create unique identifiers from digital pictures to real estate, tune into the webinar or the podcast.
Strategy Overview
The IDX Crypto Opportunity Index seeks to provide tactical upside participation to the Greyscale Bitcoin Trust (GBTC) while limiting drawdowns and downside volatility. Please visit idxinsights.com/COIN or contact info@idxinsights.com for more information before investing in this index.
Portfolio Construction from an Investment Thesis Point of View
Price momentum and the change in price momentum are evaluated over the trailing 10 to 30-day periods. This data is combined into two indicators that evaluate whether price momentum is:
- positive or negative
- increasing or decreasing
Momentum is calculated using the BTC/USD rate from top cryptocurrency exchanges (generally Binance and/or Coinbase) and is calculated over a 24 hour period, 7 days a week. A 100% long allocation in GBTC is established when momentum is both positive and increasing; otherwise, capital is allocated to a diversified portfolio of fixed income ETFs (via the IDX Tactical Fixed Income Index). The index has historically made approximately 10 or fewer trades per calendar year.
Please refer to www.idxinsights.com/smartx for more model-specific information and disclosures including index construction, hypothetical backtest assumptions and ETF start dates within the index.
Firm Overview
IDX Insights provides innovative portfolio solutions utilizing a rigorous, systematic and risk-focused approach built on existing academic research and evidence-based principles. Our team has been at the forefront of developing and delivering innovative investable indices for over a decade and we continue that mission with our focus on creating sophisticated solutions that are robust, transparent and cost-effective.