ASC AI Index - the market’s leading index of AI tokens
May 2024 Results
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 30 tokens that meet the 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 the cryptocurrency industry.
May 2024 Results
After a brutal April correction, AI tokens recovered along with the broader crypto markets. AAI returned 12.9%, in line with BTC up 11.1% for the month. While AAI couldn’t match ETH’s 24.7% rally, that is to be expected after the unexpected news that ETH ETFs were soon to be approved in the US. The major contributor to AAI’s May return was RNDR, which contributed nearly half of the index’s return after a 38% rally in the token. Notably, outperforming everything in the comp set was Nvidia stock, arguably one of the catalysts for AI tokens’ recent success.
The index value increased from 179.44 to 202.56 at month-end. Overall AAI still holds a commanding lead in YTD returns among the comp set:
While AAI is by far the top performer in the comp set YTD, this has also come with higher volatility. It tops the comp set in YTD standard deviation of returns as well. However its stellar returns also allowed it to achieve the highest Sharpe Ratio, narrowly beating out BTC and ETH.
In the May end of month rebalance, the index saw the addition of four new constituents: NetMind Token (NMT), LimeWire (LMWR), Spectral (SPEC), and Solidus AI Tech (AITECH). LimeWire, a revival of the well-known file sharing service of the 2000s, is now a GenAI Studio for content creation. Spectral, backed by investors like Polychain and Samsung, has developed a platform that allows users to create AI agents via no-code/natural language. NetMind Token and Solidus AI Tech are two more entrants in the GPU marketplace sector, which is quickly becoming ultra-competitive. They will debut with weights of 1.3% (NMT), 0.6% (LMWR), 0.6% (SPEC), and 0.5% (AITECH) in the index. As the AAI is capped at 30 constituents, the four lowest market cap tokens (OLAS, COMAI, VAI, ALI) drop out of the index for June. The new weights of the index are as follows:
Three of the top 10 market cap tokens on the index, FET, AGIX, and OCEAN, have approved a proposal to merge their respective tokens into one new token ASI (Artificial Superintelligence). FET will be known as ASI going forward, while AGIX and OCEAN will convert to ASI at fixed exchange rates. If this merger is completed on June 13th as projected, the ASI token that emerges would easily be the largest index constituent by a wide margin. For more information, see the ASC Research brief on ASI.
Index Construction and Rebalancing Methodology
ASC 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, particularly 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.
Project Focus - The protocol or platform should have a majority of its transaction volume or other usage in AI-related use cases, or in the absence of a live product or measurable usage metrics, the core focus and mission of the project must be related to AI.
The index value was set at 100 at the time of its launch on January 1, 2024. 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 of the index criteria for a given month’s rebalance, then only the top 30 tokens by market capitalization will be included.
Interested in learning more? If you’re interested in learning more about ASC AI Index, complete this form or send your inquiry to info@alphasigma.fund.
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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.
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