21FOC 21Shares Future of Crypto Index

21Shares, the world's first and one of the largest issuers of crypto exchange-traded products (ETPs), has partnered closely with MarketVector Indexes GmbH to launch the first mega theme digital asset index, the 21Shares Future of Crypto Index (21FOC).

Overview

The 21Shares Future of Crypto Index is a next-generation crypto index designed to capture the growth potential of the most dynamic and promising sectors in the crypto market. Utilizing a dynamic sector allocation strategy, the index adapts over time to reflect the evolving landscape of the digital asset universe.

Sector Selection

Based on the Global Crypto Classification Standards (GCCS), the index focuses on sectors with the highest growth potential. The represented sectors include:

• Payment Platforms
• Smart Contract Platforms
• Blockchain Accelerators
• Decentralized Finance (DeFi)
• AI and Data Solutions
• Social and Gaming

Asset Selection and Weighting

• Market Capitalization Weighting: Within each sector, assets are weighted by their market capitalization. This approach emphasizes larger, more established assets while still providing exposure to smaller, high-growth potential assets.
• Liquidity Screening: All assets undergo liquidity screening to ensure they can be traded efficiently without significantly impacting the market price.
• Caps and Floors: To promote diversification and mitigate concentration risk, caps and floors are applied to individual asset weights. This prevents any single asset from disproportionately influencing the index performance.

Rebalancing and Adjustments

The index is rebalanced periodically to adjust for changes in market capitalization, sector performance, and to incorporate new assets that meet the selection criteria. The rebalancing frequency is determined to balance responsiveness to market changes with trading efficiency.

Objective

The primary objective of the index is to provide investors with a comprehensive and dynamic exposure to the most promising sectors in the crypto market. By leveraging the GCCS and a dynamic sector allocation strategy, the index aims to capture growth opportunities while managing risks associated with market volatility and asset concentration.

Benefits

• Highly  Diversified Crypto Index: Exposure to 6 fast-growing sectors covering the majority of the crypto market cap.
• Dynamic Sector Allocation: Though fixed in the short term, sectors and allocations evolve over time as the market matures, ensuring the portfolio remains balanced between established assets and emerging opportunities.

Mega-Thematic: The index is structured