“We designed the BTI to help identify trends in the price of bitcoin, assisting asset managers to create new dynamic products, and helping investors make better-informed allocation decisions over a long-term horizon.”
CoinDesk Indices (CDI) has announced the launch of the Bitcoin Trend Indicator (BTI), a daily signal which conveys the presence, direction, and strength of the trend in the price of bitcoin using a purpose-built, non-discretionary algorithm.
The subsidiary of CoinDesk is a leading provider of digital asset indices by AUM since 2014. The firm has observed that a hypothetical portfolio of bitcoin and risk-free cash informed by the BTI has reduced exposure during “crypto winters” while still participating in price uptrends.
Direction and strength of trend in the price of bitcoin
BTI broadcasts one of five possible values, each corresponding to an indicated direction and strength of trend in the price of bitcoin. The signal is calculated daily, and is derived from historical daily levels of the CoinDesk Bitcoin Price Index (XBX), using a non-discretionary methodology. It has been backtested over a five-year historical period using XBX data.
CoinDesk Indices believes that BTI is a good option for asset managers and investors who look to utilize the daily signal for long-only dynamic allocation strategies.
The BTI’s research-driven construction uses a widely utilized technique known as moving average crossovers to identify trends. This technique compares recent short-term price averages to recent long-term price averages.
Designed to be implemented in systematic strategies that allocate between bitcoin and a risk-free asset, which can help investors navigate long-term bitcoin drawdowns, reducing potential risks.
Andy Baehr, CFA, Managing Director at CoinDesk Indices, said: “We are excited to offer the Bitcoin Trend Indicator, which has been rigorously researched and constructed. We designed the BTI to help identify trends in the price of bitcoin, assisting asset managers to create new dynamic products, and helping investors make better-informed allocation decisions over a long-term horizon.”
DCG may be looking for buyer for CoinDesk
Launched in 2013, CoinDesk was acquired by Barry Silbert’s DCG in 2016 for $500,000. Its parent company Digital Currency Group is currently a struggling crypto empire whose lending unit filed for bankruptcy. The venture capital conglomerate suspended its quarterly dividends until further notice as the company seeks to preserve cash, according to a Jan. 17 letter to shareholders.
Last month, Blockworks cited anonymous sources to report that CoinDesk has been an acquisition target for Binance Capital Management (BCM). However, the publication added that the potential takeover, which was estimated at upwards of $300 million, by Binance is currently “on hold”.
Binance’s CZ clarified on Twitter that the deal is not “on hold”. “Not buying. It may be a good business. But not a fit in our geographic coverage”, he stated.
