The Hong Kong Virtual Assets Association (HKVAC) has revealed changes to several of its cryptocurrency indicators.
The HKVAC rebalancing, scheduled for January 19, will affect its central index, the top five HKVAC index, as well as the top 1O index and the large global cryptocurrency index.
The top 5 HKVAC will exclude many prominent cryptocurrencies. For example, Solana (SOL), which has recently been in the spotlight for its strides in the market, is set to replace Ripple's XRP.
Despite the tumultuous collapse of cryptocurrency exchange FTX in 2022, which sent SOL prices down more than 95%, Solana has rebounded significantly. It now boasts a year-over-year increase of 436.5% and a market cap of $42.67 billion, making it the fifth largest cryptocurrency.
In comparison, XRP saw a more modest growth of 51.5% in the same period, and despite its $31.47 billion valuation, it now ranks sixth.
Additional changes made by HKVAC include removing Filecoin (FIL), Binance USD (BUSD), Maker (MKR), Ivy (IVY), and TrueUSD (TUSD) from the large global cryptocurrency index, making way for the NEAR protocol. Internet computer (ICP), persistence (IMX), optimism (OP), and injection (INJ).
The re-evaluation of the index by HKVAC, which ranks digital asset trading platforms and cryptocurrency market indices, is an important measure of the ongoing shifts in the cryptocurrency market. It reflects not only current market dynamics but also potential growth areas, as viewed by industry experts.
For example, TRON (TRX) made an impressive recovery from the bear market decline between 2018 and 2020, with a 100% rally in 2023. However, it will be replaced in the top 10 index by Avalanche (AVAX), which itself has Supported by its recent rise and partnerships with JPMorgan and Citi for asset tokenization initiatives.
These benchmark indicators that investors use to measure the performance of digital assets can significantly impact investment decisions. As such, the visibility and perceived market power of the cryptocurrencies involved can be significantly affected.
The HKVAC review is consistent with Hong Kong's proactive approach to the cryptocurrency sector. This comes amid preparations to welcome spot cryptocurrency ETFs to the semi-autonomous region after the US Securities and Exchange Commission (SEC) approved 11 applications for bitcoin ETFs.
The Hong Kong Securities and Futures Commission (SFC) has insisted that cryptocurrency transactions must be conducted through platforms licensed by it or through approved financial institutions, ensuring regulatory compliance and investor protection.
