{"id":183,"date":"2014-07-10T12:10:00","date_gmt":"2014-07-10T12:10:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/pantera-capital-launches-bitindex\/"},"modified":"2021-07-26T17:47:42","modified_gmt":"2021-07-26T15:47:42","slug":"pantera-capital-launches-bitindex","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/07\/pantera-capital-launches-bitindex.html","title":{"rendered":"Pantera Launches BitIndex to Track Bitcoin"},"content":{"rendered":"
\n
Pantera Capital, an investment fund that focuses on bitcoin, has announced an index it says will allow investors to track the cryptocurrency\u00a0over a medium-term timeframe.<\/b><\/i><\/div>\n<\/div>\n
\n
(CoinDesk<\/a>)\u00a0Dubbed the BitIndex, it takes into account seven different factors that Pantera believes accurately\u00a0charts bitcoin\u2019s overall\u00a0progress.<\/div>\n<\/div>\n
\n
What\u2019s interesting is\u00a0Pantera Capital<\/a>\u00a0is not including price in the BitIndex, instead tracking other data sources that it believes lends to bitcoin\u2019s technological progression.<\/div>\n<\/div>\n
\n
In the fund\u2019s monthly report for June, Pantera stated:<\/div>\n<\/div>\n
\n
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\u201cWhile some other indices also offer guidance (such as trade in USD), we chose not to include them because of unreliable data, limited availability, or other statistical problems.\u201d<\/div>\n<\/div>\n<\/blockquote>\n

Components of index<\/h2>\n
\n
The seven measures that the BitIndex includes, in order of importance, is as follows:<\/div>\n<\/div>\n
    \n
  1. Developer interest\u00a0on GitHub.<\/li>\n
  2. Merchant adoption\u00a0as a measure of\u00a0consumer adoption.<\/li>\n
  3. Wikipedia views\u00a0measuring\u00a0bitcoin education.<\/li>\n
  4. Hashrate\u00a0by\u00a0logarithmic scale corresponding to orders of magnitude.<\/li>\n
  5. Google searches\u00a0captured by the number of times \u201cbitcoin\u201d appears.<\/li>\n
  6. User adoption\u00a0as measured by wallets.<\/li>\n
  7. Transaction volume\u00a0on the bitcoin network.<\/li>\n<\/ol>\n
    \n
    Pantera\u2019s\u00a0letter does not indicate\u00a0how it calculates the merchant adoption metric, although statistics for hashrate, user adoption by wallets and transaction volume are publicly available from a number of different data sources.<\/div>\n<\/div>\n
    \n
    Information from websites such as GitHub for developer interest, as well as Wikipedia and Google to identify mainstream interest and popularity, is also readily available.<\/div>\n<\/div>\n
    \n
    While it appears the BitIndex closely followed pricing movements in the latter half of last year, measurements the fund uses\u00a0show that, despite negative\u00a0news events like Mt. Gox<\/a>\u00a0and the\u00a0US Marshals\u2019 BTC auction<\/a>,\u00a0bitcoin is on an\u00a0uptrend.<\/div>\n<\/div>\n

    Always about\u00a0price<\/h2>\n
    \n
    BitIndex offers a different\u00a0look at technological aspects of bitcoin rather than infatuation with the cryptocurrency\u2019s valuation.<\/div>\n<\/div>\n
    \n
    In fact, the firm says\u00a0that it is value\u00a0distortions\u00a0that influenced the creation of BitIndex, specifying,\u00a0\u201cprice manipulation at Mt. Gox and\/or the Chinese and in the first quarter of 2014 due to the collapse of Mt. Gox\u201d, as problems defining bitcoin<\/a>\u2019s true worth.<\/div>\n<\/div>\n
    \n
    There is a lot of interest in bitcoin\u2019s value, and the vast number of exchanges with different prices has created a need for composite pricing information.<\/div>\n<\/div>\n
    \n
    CoinDesk has its\u00a0Bitcoin Price Index<\/a>\u00a0and the Winklevoss twins, who are major investors in bitcoin<\/a>\u00a0and are trying to launch an ETF for the cryptocurrency, also have the creatively named\u00a0Winkdex<\/a>.<\/div>\n<\/div>\n
    \n
    However, Pantera states unequivocally in its letter that the BitIndex gives people a longer-range view of bitcoin than what price indexes offer:<\/div>\n<\/div>\n
    \n
    \n
    \u201cPantera has developed the BitIndex to inform our views on bitcoin. It is not a tool to forecast bitcoin\u2019s price. This index is designed to assist us in forming our views on what may happen to bitcoin in the medium term.\u201d<\/div>\n<\/div>\n<\/blockquote>\n

    Focus on investing<\/h2>\n
    \n
    While the\u00a0BitIndex may\u00a0provide a glimpse into where bitcoin is going, it is questionable whether it\u00a0offers\u00a0insight into the bitcoin economy\u2019s adoption rate as a store of value \u2013\u00a0seemingly something Pantera\u2019s investment clients would be wanting\u00a0the firm to do.<\/div>\n<\/div>\n
    \n
    \u201cThe index looks at the interest level across a couple key populations: general public, users, developers, and merchants, and should be a pretty accurate judge of the overall growth of bitcoin\u201d, said Andy Beal, a lawyer with Crowley Strategy that advises bitcoin startups.<\/div>\n<\/div>\n
    \n
    He added, however:<\/div>\n<\/div>\n
    \n
    \n
    \u201cThe only group that was not included that can really affect growth is investors.\u201d<\/div>\n<\/div>\n<\/blockquote>\n
    \n
    Pantera<\/a>\u00a0is backed by Fortress Investment Group, Ribbit Capital and Benchmark Partners. Its focus on bitcoin began in 2013, and the firm invests directly in BTC as well as funds\u00a0startups that operate within the industry.<\/div>\n<\/div>\n
    \n
    Bloomberg\u2019s\u00a0company overview information indicates<\/a> that, prior to concentrating on bitcoin, Pantera Capital previously invested in\u00a0public equity, fixed income, currency and commodity markets.<\/div>\n<\/div>\n

    Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Pantera Capital, an investment fund that focuses on bitcoin, has announced an index it says will allow investors to track the cryptocurrency\u00a0over a medium-term timeframe. (CoinDesk)\u00a0Dubbed the BitIndex, it takes into account seven different factors that Pantera believes accurately\u00a0charts bitcoin\u2019s overall\u00a0progress. What\u2019s interesting is\u00a0Pantera Capital\u00a0is not including price in the BitIndex, instead tracking other data […]<\/p>\n","protected":false},"author":1,"featured_media":695,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,37,76,82,514],"tags":[704,764,771,1173],"yoast_head":"\nPantera Launches BitIndex to Track Bitcoin -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/holytransaction.com\/blog\/2014\/07\/pantera-capital-launches-bitindex.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pantera Launches BitIndex to Track Bitcoin\" \/>\n<meta property=\"og:description\" content=\"Pantera Capital, an investment fund that focuses on bitcoin, has announced an index it says will allow investors to track the cryptocurrency\u00a0over a medium-term timeframe. 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