ASC AI Index - The Market’s Leading Index of AI Tokens
ASC AI Index (AAI) tracks the price performance of the top tokens in the AI sector, using a rules-based criteria designed to reflect the landscape of AI tokens. The index includes the top 20 to 30 tokens that meet minimum criteria of market capitalization, daily trading volume, and quality of exchange venues. AAI serves as a performance tracker for the crypto AI sector and will also be developed into an investable basket product in the future, for investors seeking AI-sector specific exposure within crypto.
Index Construction and Rebalancing
We use the following criteria for the index’s token selection process:
Market Capitalization - AAI requires a minimum token market capitalization of $20 million for inclusion in the index, based on a token’s average market cap over the prior 30 days. This ensures that the index captures the most important and representative tokens of the sector, while excluding tokens with such low market caps that they can be easily manipulated.
Presence on Tier 1 or Tier 2 Exchanges - The index only includes tokens that are trading on at least one Tier 1 or Tier 2 exchange, since less reputable exchanges often engage in wash-trading in order to boost the apparent volume. This ensures the index is only tracking tokens with legitimate price discovery that reflects actual trading in the sector. For the purpose of this index, Tier 1 or Tier 2 exchanges are defined as centralized exchanges Coinbase, Binance, Kraken, OKX, ByBit, Kucoin, and Gate.io, as well as DEXes Uniswap, Jupiter, Orca, PancakeSwap, Trader Joe, and Raydium. The list of exchanges will be reevaluated quarterly given the fast-changing nature of the crypto exchange landscape, in particular on the DEX side.
Trading Volume - The threshold for inclusion in the index is an average daily trading volume of at least $500k over the prior 30 days, with a majority of volume coming from Tier 1 or Tier 2 exchanges.
The index value is set at 100 at the time of its launch on January 1, 2024. The initial index constituents are as follows, with corresponding market caps and index weights:
The index is rebalanced monthly based on the initial selection criteria of market cap, trade volume, and exchange listings. There are no caps or floors to asset weights, as the index is intended to reflect the sector makeup accurately even when it is dominated by a small number of tokens. If more than 30 tokens meet all the index criteria for a given month’s rebalance, then only the top 30 tokens by market capitalization will be included.
January 2024 Results
Bittensor (TAO), the index’s second largest holding with a weight of 22%, was the top performer by far with a 76% return in January. Its performance was driven in part by an endorsement by Vitalik Buterin, founder of Ethereum. AAI returned 12.1% overall, though notably without TAO the index would have been down 4.6% on the month, highlighting TAO’s huge outperformance. The average token’s return ex. TAO was -8.1%. Overall, AAI significantly outperformed both equities and the broader crypto market in January. The index value increased from 100 to 112.1 at month end.
The new index weights for February are as follows, with TAO increasing its weight by 11.5% and a reduced weight between 1.6% and 3.7% for RNDR, FET, and AGIX. Additionally, there are four new entrants to the index that passed the market cap and liquidity thresholds, bringing the index to its max number of 30 constituents: PAAL AI (PAAL), Artificial Liquid Intelligence (ALI), Zignaly (ZIG), and Aleph.im (ALEPH). These four new tokens in total make up 3.2% of the index.
DISCLAIMER
This is for informational use only. This is not investment advice. Other than disclosures relating to Alpha Transform Holdings (ATH) and Alpha Sigma Capital (ASC) this information is based on current public information that we consider reliable, but we do not represent it as accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our information as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this press release.
The information on which the information is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, the company website, the company white paper, pitchbook, and any other sources. While Alpha Sigma Capital has obtained data, statistics, and information from sources it believes to be reliable, Alpha Sigma Capital does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature, and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.