Ethereum Surpasses 2021 High as KT5 Index Soars
Cryptocurrencies have seen significant movements recently. Ethereum (ETH) surpassed its 2021 all-time high, outpacing Bitcoin (BTC) in both price and volume. Meanwhile, the KT5 Index, tracking top digital assets, has shown remarkable growth.
The KT5 Index, comprising BTC, ETH, SOL, DOGE, and XRP, has outperformed ETH by around 50 percentage points since the start of 2023. It has achieved log returns of over 160% in the same period. This strong performance can be attributed to the varying return correlations among its constituent assets, offering diversification benefits.
Bitcoin pushed back towards its all-time high near $123k, tracking a broader risk rally and a softer USD. The KT5 Index also grew at a greater rate than BTC in the month following the U.S. election. This growth was not driven by a single asset; for instance, XRP's correlation with SOL was just 0.18, and SOL had a very low correlation (0.06) with DOGE.
ETH's performance, while impressive, has been outshone by the KT5 Index's growth. The Index's diverse assets and low correlations have contributed to its strong performance. As the crypto market evolves, investors may find such diversified indices appealing.
