Trading crypto assets offers interesting opportunities for investors, and the recent bull run is attracting a significant influx of new funds and people. However, applying sound risk management, diversification, and advanced strategies is difficult for traders, and new innovative solutions are emerging.
Crypto indices are diversified crypto baskets that offer holistic exposure to predefined market segments and/or advanced trading strategies, allowing investors to diversify with ease and decrease risks through sound risk management. Some crypto indices focus on thematic segments, such as RWA, AI, meme coins, DePin, or other sectors, while other indices focus on advanced strategies such as momentum, value, arbitrage, and more. However, the offering is still limited because crypto indices are more structured products compared to single coins, and investors must understand the underlying value proposition and index structure before investing.
In this analysis, we’ll consider the most well-known crypto indices providers in order for you to evaluate which is the most effective platform for you to meet your goals. So, what are the best crypto exchanges for crypto indices we’ll analyze in this guide?
Trakx
Bitpanda
Swissborg
Index Coop
Coinbase
Trakx: Leading platform for crypto-index trading
Trakx is a French fintech founded in 2019 that currently offers the widest selection of crypto indices. Even though it also provides single-coins trading, the main offering is focused on crypto indices, including different types of crypto baskets, such as “simple access”, “thematic”, “smart investing”, “risk-profiled”, “external”, and “stake & yield”.
Their total offering includes more than 25 crypto indices, and they are adding new indices regularly to meet their clients’ request and stay close to the latest trends. Every one of their crypto indices is rebalanced on a monthly basis to ensure they remain aligned with the predefined requirements of market capitalization and liquidity, and, where relevant, that they stay ahead of market trends.
Moreover, because some indices also implement smart beta strategies such as momentum, value, and size, allowing swing traders and most sophisticated investors to invest passively without worrying about entry and exit points, the exposure is dynamic and re-adjusted automatically based on market indicators and trends.
Pros of Trakx
Widest selection of crypto indices
Advanced crypto trading strategies
Automatic rebalancing
Highly-regulated platform
Inherent sound risk management practices
Low management and trading fees
Customized solutions for businesses
You own the underlying assets
Top-notch security
Cons of Trakx
A limited selection of single coins
No mobile app
Still not available in the US and Canada
Bitpanda: Cryptocurrencies, stocks, ETFs, commodities
Bitpanda is a well-known trading platform that focuses on multiple sectors, including crypto assets, stocks, ETFs, and commodities, allowing investors to choose the best assets for their needs. The platform was founded in Austria in 2014, and it attracted a consistent number of traders due to its user-friendliness.
Their crypto indices solutions are interesting but limited, with a total of eight crypto indices currently available. Three of their indices focus on the top cryptocurrencies by market cap, while the other four are thematic, focusing on smart contracts, DeFi, infrastructure, media, and meme coins.
The composition of indices is controlled by MarketVector Indexes, owned by VanEck, meaning that Bitpanda is not the direct owner of the indices’ infrastructure. As in the case of Trakx, the indices are rebalanced monthly, and you directly own the underlying assets included in the crypto indices.
Pros of Bitpanda
Well-known brand
User-friendly mobile app
Automatic rebalancing
Highly-regulated platform
Stocks and commodities are also available
You own the underlying assets
Top-notch security
Crypto debit cards available
Cons of Bitpanda
A limited selection of crypto indices
No advanced strategies
Still not available in the US and Canada
It doesn’t directly own the underlying technology
Significant management and trading fees
Swissborg: Simplicity and thematic indices
Swissborg is a Swiss platform born in 2017 that focuses on single cryptocurrencies and thematic baskets, aiming to innovate the investing experience through easy-to-understand solutions and transparent methodologies, with licenses in France and Estonia.
They offer both single assets and thematic crypto indices, with a total offering of eight indices. The crypto indices focus on DeFi, Memecoins, RWA, gaming, the best blockchains, and Bitcoin & gold, offering exposure to significant and relevant segments of the crypto market.
As in the case of Trakx and Bitpanda, the indices are rebalanced automatically to take profits from outperformers and accumulate tokens at lower price points, seizing opportunities while partially controlling the risk/reward potential. One factor to consider is that there is a minimum amount to invest to get exposure to their thematic indices.
Pros of Swissborg
User-friendly mobile app
Automatic rebalancing
Highly-regulated platform
Inherent sound risk management practices
Ease of use
You own the underlying assets
Top-notch security
Cons of Swissborg
A limited selection of crypto indices
No advanced strategies
Still not available in the US and Canada
Index Coop: DAO investment platform
Index Coop was launched in 2020 by Set Labs as a DAO (Decentralized Autonomous Organization) with the goal of building simple, accessible, and secure on-chain structured DeFi products.
The platform offers 10 crypto indices, and it focuses mainly on ETH-derived products, offering also 2x leverage baskets. Six of its baskets are specifically focused on ETH, aiming to get returns from staking, yield, and performance of the underlying assets. However, they also focus on Metaverse and DeFi tokens, even if the selection of crypto indices is quite limited.
Unlike the platforms analyzed previously, they don’t have a native wallet, so you need to connect your own external wallet to start trading crypto indices. The interface is simple and user-friendly, but they don’t show the chart performance of the assets, making it suitable especially for long-term holders but not for short and medium-term traders.
Pros of Index Coop
User-friendly interface
Automatic rebalancing
Ease of use
You own the underlying assets
Indices available on other platforms
Cons of Index Coop
A limited selection of crypto indices
Unclear regulation
Based in the Cayman Islands
No mobile app
Coinbase: Highly-regulated crypto exchange
Coinbase is one of the oldest and most regulated crypto exchanges. It was founded in 2012 and is based in San Francisco, United States. It offers a wide selection of crypto assets and recently created its first crypto index, the Coin50.
It is the largest public crypto company, with top-notch security practices and one of the few platforms fully regulated in the US, making it one of the most common choices for United States citizens.
However, regarding crypto indices, its offering is limited to only one recently launched crypto index, the Coin50, which offers market-cap-weighted exposure to the 50 coins. One downside of this index is that the rebalancing occurs quarterly, not allowing investors to stay ahead of trends effectively.
Pros of Coinbase
Well-known brand
User-friendly mobile app
Automatic rebalancing
Highly-regulated platform
You own the underlying assets
Top-notch security
Crypto debit cards available
Cons of Coinbase
Only one crypto index is available
High trading fees
No advanced strategies
A Final Overview: What is the Best Platform for Trading Crypto Indices?
As we have explored in our analysis, each platform has different pros and cons, and the best choice depends on the specific requirements of crypto investors. If you’re looking for the widest selection of crypto indices, the best choice is Trakx, as they offer various thematic and smart beta indices, providing investors with multiple solutions for specific needs.
However, if you’re based in the US, the choices are limited to just a few platforms since most of the exchanges analyzed are not available in this country. If you’re a US citizen, the best choice is Coinbase, even if it only has a single crypto index, because it is regulated and secure to use. Lastly, if you want to trade crypto indices while enjoying the benefits of a crypto debit card for cash outs, Bitpanda could be the right choice for you.
Source: https://coinpaper.com/6411/what-are-the-best-crypto-exchanges-for-crypto-indices