The Hong Kong Virtual Assets Consortium (HKVAC), a prominent rating agency specializing in the evaluation of crypto assets and exchanges, has unveiled its latest virtual asset index. With a focus on market capitalization, the comprehensive index comprises 30 cryptocurrencies, including notable contenders such as Shiba Inu (SHIB) and XRP.
Renowned Chinese crypto and blockchain reporter Colin Wu brought attention to this development in a recent tweet, highlighting the significance of HKVAC’s recognition.
HKVAC’s primary objective is to provide investors and regulators with a reliable benchmark for assessing the performance and associated risks of virtual assets. Notably, the newly introduced index excludes Solana (SOL), prompting investor inquiries regarding the rationale behind this omission.
Hong Kong’s HKVAC Index: Weights And Risk Ratings
The agency’s official website presents two versions of the index. While the second includes risk ratings during the weighing process, the first allocate weights to crypto assets depending on their market capitalization.
For the purpose of determining the risk ratings, HKVAC employs a hybrid technique that blends expert-driven and data-driven methodologies. Just a few of the data components used in comprehensive risk assessment include security, liquidity, compliance, and governance.
Shiba Inu’s participation in the index reflects the cryptocurrency ecosystem’s rising importance of SHIB. Furthermore, HKVAC’s choice to index XRP reflects the conflicting viewpoints held by international organizations on the security classification of this digital currency.
It is significant to remember that, despite HKVAC’s prominent position, its index does not have a formal affiliation with the Securities and Futures Commission (SFC) and runs autonomously. Its reference value may thus be constrained for investors looking to comply with the SFC’s regulatory framework.
Johnny Ng, a well-known Hong Kong legislator, Huobi, KuCoin, and other industry participants supported the founding of HKVAC in May 2023. While offering the public informational tools on cryptocurrency investments, the organization hopes to encourage openness and responsibility in the market for exchanging virtual assets. Additionally, HKVAC works to promote Hong Kong’s ambitions of becoming a key international center for Web3 technologies by promoting the use of Web3 infrastructure.
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