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Too Many Cryptocurrencies? Huobi Launches Quantitative Model for Investors

A major China-based exchange has launched a new quantitative analysis tool designed to help traders make long-term cryptocurrency investments.

Updated Dec 10, 2022, 9:44 p.m. Published Jun 23, 2017, 9:00 a.m.
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Beijing-based cryptocurrency exchange Huobi has released a quantitative analysis model that evaluates different blockchain-based currencies using a range of variables.

Named SMARTChainhttps://www.huobi.com/topic/index.php?a=eth_report and designed with support from academics, the model intends to serve as a guide for global investors who have an interest in cryptocurrencies and a need for a more scientific way to appraise each platform's differences. Currently in beta, the results of the model will be updated monthly and quarterly to focus on those with the highest market capitalization – the value of all their issued tokens combined.

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Lending weight to the project, is that Tsinghua University, one of the most prestigious institutions in China, had its School of Finance design the evaluation model. It ultimately decided to use five variables for the analysis: a blockchain's relevance for real-life applications; its public and media attention; its trading volume; its credibility and risk for inflation; and its technological design.

Evaluated ultimately by the Huobi Blockchain Research Center, the model assigns scores to each blockchain in order to generate a final top-20 ranking.

Bitcoin, ethereum and litecoin, for example, ranked in top three in an initial analysis, garnering scores of 88.07, 70.67 and 69.62 points respectively. Ripple and ethereum classic came fourth and fifth, respectively.

According to the tool's creators, the scores suggest how much potential each cryptocurrency has as a long-term investment. Interestingly, perhaps, the three top tokens are also the only cryptocurrencies that can be traded on Huobi, where litecoin dominates volume, followed by ether and bitcoin

Still, as the model has only just launched, those involved admit its accuracy and efficiency remain to be seen.

Raining coins image via Shutterstock

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