CHAPTER 15

FX and Crypto Indexes

Benchmarks for currencies and digital assets

Opening question

“How is a dollar index or a crypto index built?”

In this chapter

Why currencies and crypto need indexes, and what makes FX indexes unusual
The US dollar index and how its geometric formula works
Trade-weighted and real effective exchange rates, with a dong example
FX factor indexes for carry, momentum and value
Crypto indexes: market-cap, capped and equal weighting
Reference prices: turning trades on many venues into one number
Governance and hard cases: forks, delistings and depegs
An illustrative NXW Crypto 10 basket and an NXW Asia FX index (simulated)

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This chapter is in the full book

Chapter 1 is free to read online. The full text of chapter 15 — with its tables, figures, worked examples and practice lab — is available in the complete edition of Forex and Crypto Investing: From Theory to Practice (Volume 3, NXW Investment Library).

Read Chapter 1 free Get the full book — contact@nxw.vn

Sections of this chapter

15.1 Why indexes for currencies and crypto?

15.2 The US dollar index

15.3 Trade-weighted and effective exchange rates

15.4 FX factor indexes

15.5 Crypto indexes: weighting and caps

15.6 Data and reference prices

15.7 Governance: forks, delistings and hard cases

15.8 Two illustrative NXW indexes (simulated)

15.9 Indexes for a Vietnamese investor

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