The Harvested Digital Ten is a market capitalization weighted index of the top 10 digital currencies by market capitalization. The index seeks to provide exposure to the largest digital assets with a quarterly rebalance. It is designed for passive investors to gain exposure to the asset class with objectives of diversification, representation, and benchmarking utility.
Ten was chosen as the number of coins for practical and implementation purposes. The markets are currently dominated by several large coins, and after ten the portion of the index represented would be less than 1% in most cases. While more coins add diversification, there is also the cost and complexity of trading across numerous coins.
Stablecoins are specifically excluded from the index. These are defined as coins who seek to replicate the value of another fixed currency, either through reserves or algorithmic methods. Examples include USDC, USDT, amongst many others.
The specific coins selected may not represent the actual largest coins by market capitalization in the entire crypto ecosystem. Due to regulatory restrictions, certain coins may not be available to US citizens, or in approved custodial accounts. Further certain coins may be excluded due to their trading price, value proposition, or other fundamental factors. Ultimately the selection of coins is discretionary, and may change at any rebalancing.
Market capitalization is snapshotted prior to rebalancing. The index is rebalanced quarterly, though this may differ slightly due to market holidays, access to exchanges, and/or data sources.
Harvested Financial LLC manages separate accounts for individuals who seek to track the value of this index. For these accounts, rebalancing is done during the final week of a given quarter, up to the final rebalancing date. Due to the price volatility of digital assets, the timing is subject to discretion based on overall market conditions. Liquidity, price movement, and spread width are amongst the numerous factors reviewed to determine optimal timing.
Replication of the index for individual accounts will not be exact due to implementation and replication costs. Trading fees, rebalancing timing, and rounding errors all contribute to what can generically be termed “tracking error”. Depending on the performance of individual components, this may
Cryptocurrencies involve significant degrees of risk, and are not suitable for all investors. Before considering an investment in these, please be sure to read our ADV, as well as specific Risk Disclosures for Crypto Currencies.