ASC AI Index - the market’s leading index of AI tokens

March 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. 

March 2024 Results

AAI returned 35.2% for March 2024, led by AIOZ (249.6%), FET (107.5%), AGIX (79.0%), THETA (66.8%), and RNDR (42.4%). These five components alone contributed 31% of the index’s overall 35% return. AAI’s return was more than double that of BTC and three times higher than ETH, an impressive continued outperformance even in a crypto bull market. The index’s returns are somewhat ‘top-heavy’ in that the top 15 assets by market cap returned 54% while the bottom 15 returned 12% (which would still have been enough to beat ETH), an unusual situation historically, but not unlike that of the S&P500 today which is led by the ‘Magnificent Seven’ of AAPL, MSFT, TSLA, NVDA, GOOGL, AMZN, and META. Like equities today, owning the highest quality megacaps has been the way to outperform in this market. The index value increased from 191.23 to 258.64 at month-end. 

In the April 2024 rebalance, the index saw the addition of three new constituents: Virtual Protocol (VIRTUAL), Delysium (AGI), and Nosana (NOS). Virtual Protocol functions as a decentralized factory for producing diverse AI entities capable of text, voice and motion responses, powering metaverses with AI characters. Delysium is a similar competitor but with a focus on creating ‘AI-Twins’, intended to be your own personal avatar for your online experiences. Nosana is a Solana-based GPU grid, which allows consumers, miners, and businesses to monetize their idle hardware by becoming a Nosana Node. They will debut with weights of 1.6% (NOS), 1.2% (AGI), and 0.5% (VIRTUAL) in the index. As the AAI is capped at 30 constituents, the three lowest market cap tokens (ENQAI, DNX, ALEPH) drop out of the index for March. 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 reportedly approved a proposal to merge their respective tokens into one new token ASI (Artificial Superintelligence). FET would be known as ASI going forward, while AGIX and OCEAN would convert to ASI at fixed exchange rates. If this merger is completed in May as projected, the ASI token that emerges would easily be the largest index constituent by a wide margin. We are monitoring the merger’s progress and will soon issue additional research on this topic, and the broader implications it has for token issuance and tokenomics.

Index Construction and Rebalancing Methodology

ASC uses the following criteria for the index 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. 

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.

Unless otherwise provided in a separate agreement, Alpha Sigma Capital does not represent that the contents meet all of the presentation and/or disclosure standards applicable in the jurisdiction the recipient is located. Alpha Sigma Capital and its officers, directors, and employees shall not be responsible or liable for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses, or opinions within the report.

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.