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MVDACS

MarketVector Digital Asset Classification System

The digital assets market has expanded fast over the past several years, with new protocols and applications constantly being developed. Participants in the digital assets market are eager to comprehend its diverse use cases, allocate cash, and manage investments. As the asset class continues to expand and market volatility persists, the necessity for performance monitoring and risk management in digital asset markets increases. To accomplish this, market players require assistance traversing the universe of digital assets and categorizing these assets to better define their risk profile and comprehend their returns.

The world has gone from a singular focus on Bitcoin to a much wider adoption of DeFi apps, distributed computing platforms, NFTs etc. As with the equity markets, categorization of sub asset groupings into sectors and more recently themes are important in the institutional adoptions of diverse asset classes.

Classification Framework MarketVector DACS Rulebook

Our classification framework for digital assets

MarketVector Indexes created the MarketVector Digital Asset Classification System in 2020 in order to provide an efficient investment tool for capturing the breadth, depth, and progress of crypto sectors.

A three-tiered, hierarchical industry classification system underpins the category scheme.Cryptoassets are classified quantitatively and qualitatively. At the Industry level, each protocol is allocated a single classification based on its primary business activity. MarketVector considers the economic driver and end-user demand to be critical variables in establishing the primary business activity of a protocol.

However, market perception and technical changes are acknowledged as vital and relevant information for classification reasons and are considered during the monthly review process.

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    Categories
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    Industry groups
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    Industries
How does our taxonomy benefit investors?

Classifications can be useful for identifying market cycles and quickly assessing which sectors are outperforming. It enables investors to exploit those narrative plays end enhance the alpha potential of their portfolios. Our taxonomy helps to create sector-based and sector-rotation plans that are consistently specified at the level our clients specify. It also enables to compare and report on sector exposures versus peers or benchmarks.

How does it work?

On a monthly basis, we screen the token universe by market cap. Whenever a token is larger than $ 250 Mio. in size, we do the deep dive and screen the protocol. We read the 3rd party research, look at the whitepaper, read the discord channel to identify the value driver and end user demand. We defined a 3 Tier system of - categories, industry groups and industries.

Our classification system

Leaders indexes

These broad category indexes capture the performance of coins with $250m market cap and $10m ADTV. In addition to the broad categories, MarketVector provides a Leaders Index for each Index category. The Leaders Indexes capture the performance of coins with $1bn market cap and $25m ADTV, and introduces additional screening requiring the coins to be traded on a major US exchange and supported by a reputable crypto custodian. In addition, the investable Leaders indexes include a 20% buffer for existing constituents so as to limit turnover.

Our research on digital assets

Our digital assets indexes performance

Index Name Symbol Last Close Open Last Change Change (1Y) Range (1Y)
MVSCLE 172.76 172.76 - - -% 100.66 - 220.21
MVMELE 7.60 7.60 - - -% 4.31 - 15.25
MVIALE 250.08 250.08 - - -% 136.10 - 398.20
MVDFLE 45.22 45.22 - - -% 20.86 - 55.98
MVCEX 340.57 340.57 - - -% 112.14 - 365.37
MVBTC 209,480.33 209,480.33 - - -% 85,097.83 - 231,974.69
MEMECOIN 106.00 106.00 - - -% 25.89 - 165.44