Upbit, the second largest cryptocurrency exchange service in South Korea and the fifth largest in the world regarding 24-hour trade volume has announced plans to launch a cryptocurrency index service. The index service will be the first of its kind in the South Korean cryptocurrency market. In an article appearing on Business Korea dated Friday, March 23, 2018, Dunamu, the parent company that owns Upbit declared its intentions to launch the Upbit Cryptocurrency Index (UBCI).
The new cryptocurrency index will provide a standardized framework for measuring the crypto market conditions. The framework is going to be achieved using a detailed coin quoting standard. The UBCI is expected to aid investors in understanding the intricacies of the crypto market as well as they all roll up to form the bigger picture. The plan to create a crypto index has been a significant part of Upbit’s goal, since the platform was launched in October 2017. There are often considerable differences between the crypto prices in local and international markets. The difference in rates of crypto is usually as a result of the difference in the demand in different countries. Upbit aims to make its index to become an internationally recognized cryptocurrency index standard.
A Look at the Proposed Indices
Upbit is looking at creating a total of four different indices which are going to be produced by aggregating long-term data from the platform’s data bank and then obtaining a set of standard values in confidence intervals. The four indices being created are the Strategy Index, the Bitcoin Index, the Market Index, and the Sector Index. Except for the Strategy Index, all other indices are expected to be launched in April 2018. The Strategy Index will be launched at a yet undisclosed later date.
The Strategy Index will provide signals for monitoring trade profits based on a set of investment protocols. The Bitcoin Index as the name implies will closely track the progress of bitcoin prices. The Market Index will provide a general picture of the total crypto market liquidity thus enabling investors to have a quick, yet detailed picture of the overall cryptocurrency market. Finally, the Sector Index will help investors to classify coins belonging to a particular sector and be able to spot useful trends occurring in real-time. The UBCI is expected to measure all four indices.
Crypto, a Bit Like in the Early Days of the Traditional Finance Market
According to Lee Seok-woo, the President of Dunamu, the crypto market in its present form bears a lot of resemblance to the early days of the traditional finance market. He expressed optimism that the UBCI will be able to play an integral role in the evolution of the crypto market. The South Korean crypto market is one of the largest in the world and events in the country often have a profound effect on the overall crypto market.
Since the end of 2017 and the beginning of 2018, rumors of an impending crypto ban in the country have persisted. The government has, however, said that it is more partial to a more regulated environment than a total ban.