You can view the TaiFu™ Indexes here: http://taifuindexes.com/
Tai Zen: What’s up guys. This is Tai Zen. With me today, I have LeonFu.com, the great oracle of cryptocurrency.
We want to make this video to introduce you the release of TaiFu index. Do you want to explain real quick to the audience about the TaiFu index?
Leon Fu: TaiFu index is an index that we created to measure the pulse of the crypto market so that all of us can see whether the market is up or down every day. It is similar to the way we do with the stock market such as the S&P 500 or the Dow Jones.
We wanted to make our own version because no one had that number that was widely cited. Then, we’ll be using this index regularly in our upcoming videos. We’ll be referencing this number.
Tai Zen: Let’s just give an example to let people know what it’s all about.
The way that the index works is that it takes the top 30 biggest the cryptos with the biggest market cap and it’s market-weighted.
For example, Bitcoin is right now around 40% of the index because it is the largest cryptocurrency, so whatever Bitcoin does will move the markets, it will account for 40% of the movement of this index.
Tai Zen: Can you explain to the audience what a market cap-weight is and how that’s calculated?
Leon Fu: We’re purely basing this on a market-cap-weighted approach, which means the larger the crypto, the bigger the influence it has on the index.
The S&P 500 and the traditional stock investing were also market cap-weighted.
I think Apple is about 5% of the S&P 500, so whatever Apple does, it accounts for 5% of the movement of the index.
We adopted a similar practice because Bitcoin right now is 40%, which we believe is it’s small enough that it doesn’t completely overwhelm the index.
Tai Zen: We’ve been looking at building this TaiFu index.
By the way, we call it a TaiFu because my name is Tai Zen and this is LeonFu.com.
Can you explain why it’s 30, but not the TaiFu 20 or TaiFu 100?
Leon Fu: There are probably around a thousand known cryptocurrencies by the time you are watching this. However, you don’t need a thousand cryptocurrencies or all or even any way near the number of known cryptos in order to build an index that represents all of the help of the market from the market.
Tai Zen: Why is that?
Leon Fu: Because the top 30 already account for 95% of the known market value.
The rest are so small collectively. Even if they do a 10X, they cannot move the entire market.
Tai Zen: They have a negligible impact on the overall market
Leon Fu: They can go up 10 20, 30, 40 times and that would be great as an investor if you have one of those, but they’re not going to move the overall crypto market.
Therefore, we use a top 30 because those coins are large enough to influence the overall health of the market
Tai Zen: We also believe in what’s already working.
One of the things that we chose the top 30 because the Dow is also made up of 30 names and it’s been working even though people don’t agree with it
Leon Fu: It’s well known for over a century.
Tai Zen: Exactly.
Let me start with something that you understand, then we’ll relate it to how the index helps you with the cryptocurrency investing.
Back in 2007, which was when I had my first massive heart attack when my boss at work rushed me to the hospital emergency room, I refused to get treatment because at that time I was the lead personal trainer at the biggest Gold’s Gym in the state of Texas.
It was really difficult for me to accept the fact that I was a personal trainer and I was suffering from a heart attack, so I just refused to get in the emergency room. Plus, I was also stubborn and hardheaded.
When I was looking up at the heart monitor, it showed that my heart rate was going from 20 beats per minute all the way up to 180, 190 beats per minute, then dropped back down again to 20 beats per minute and went back up to 180, 190 beats per minute.
As a trainer, I knew that my normal resting heart rate is usually around 78 beats per minute, so I knew that something was wrong.
I pointed out to the ER doctor and told him that there was nothing wrong with my heart, but there was something wrong with the heart monitor. He told me that the heart monitor was not broken, but my heart had broken.
After they did some blood tests, they told me that my body was releasing the last hormones that it can to try to save itself.
At that time, obviously I didn’t want to die, so I signed the release papers for them to treat me. Then, they put 4 stents in my heart in 2007.
The reason why I’m sharing you this story was thanks to the benchmark or a standard of where my heart should be, it was very easy for me to realize that something was wrong with my heart and it was unhealthy.
The reason we built this TaiFu index is no one has built an index yet for the cryptocurrency market as they have with the stock market.
In the stock market, we have 3 popular indexes such as the S&P 500, Dow Jones and t Nasdaq 100 to help us gauge the pulse of and the health of the stock market. However, in the cryptocurrency market, we don’t have anything that is the equivalent of it.
We’ve been talking about it 3 years ago, but at that time, we couldn’t do it was because the Bitcoin dominance in that was too high.
Do you want to quickly explain why we now finally released the TaiFu 30 index after the Bitcoin dominance fell below 50%?
Leon Fu: Yeah. The other problem with creating an index is Bitcoin has been absolutely the dominant crypto since its inception until recently. It’s historically been 80, 90% or even more than that. You might just ignore everything else and call it Bitcoin because of that.
However, Bitcoins dominance has been going down. We believe that it will continue to go down, not that bitcoin will go down. I believe Bitcoin will get to 10,000 and still lose its number 1 position.
I feel that we are at the point we can just release an index where everything is proportionally weighted to measure the overall market more accurately.
Tai Zen: For your information, TaiFu index’s birth date or the inception date was on June 17th.
Do you want to explain why we started out at 100 points?
Leon Fu: Every point is roughly about a billion in market cap. The crypto markets are somewhere between 90 to 110.
Therefore, I think 100 is a good number for us to start this index because you want people can easily comprehend.
Tai Zen: We will also want to start with 100 so that if the people are outside of America where they don’t make a very high end come, they can still invest into the market just by monitoring it.
Even if they started with $10 or $100, it’s something that’s within reach of them. We didn’t want the cryptocurrency investing to be out of reach for the average person sharing.
That’s the reason why we started off at 100. Is there anything else you want to add?
Leon Fu: That’s it
Tai Zen: Okay.
We just want to make this short video to introduce the birth of the TaiFu 30 cryptocurrency market index.
You can check it out at Taifuindexes.com and you can see it updated every day. We also have daily charts to show you how it moves up and down daily. We have an hourly chart below as well.
Obviously, below those charts, we have a list of the 30 components with the price and the percentage each crypto moves in the points so that you will have a quick snapshot.
Every day at UTC 0 hours, it updates a new data point on the index for the daily chart. For the hourly chart, it updates every 60 minutes.
You can look at that in the morning no matter what country you’re in and you can basically tell the pulse of the markets. This is our purpose of creating the TaiFu top 30 cryptocurrency index. We hope that it helps you out with your cryptocurrency investment as well.
If you want to learn more about this, you are welcome to subscribe to us at www.cryptocurrency.market/newsletter. We’ll update you on how to use this tool.
If you have any friends, family, or relatives that are interested in investing in Bitcoins or cryptocurrencies, you’re welcome to subscribe to the newsletter and we’ll be able to help them out.
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We’ll look forward to seeing you in the future video.