Index Methodology
Cap-Weighted vs Equal-Weighted Crypto Indices
Index Methodology · Sep 29, 2026
Index Methodology
Same ten coins, three portfolios. Weighting scheme changes risk more than counting tickers does.
Three shapes, same coins
Imagine ten eligible large-cap assets.
Pure market-cap. Bitcoin and ether can take ~90% of the weight. The other eight are decoration on a normal day. Faithful. Concentrated.
Capped market-cap. Largest name clipped (for example 30%), others capped (for example 20%), excess redistributed. The CoinDesk 20 uses a version of this logic. Same universe, thicker tail.
Equal weight. Each name gets 10%. Maximum breadth, highest turnover — every rebalance trims winners and tops up losers.
Same ten tickers. Three different portfolios. The gap between bar one and bar three is larger than the gap between “five holdings” and “ten holdings.” That is the point of Your Ten-Asset Crypto Index Is Mostly Two Assets.
When each wins
Market-cap leads when bitcoin leads. Spot BTC ETFs and risk-off tapes have often looked like this stretch of the cycle.
Capped and equal-weight lead when the market broadens and large alts outperform — the regime the Altcoin Season Index is built to flag.
So the honest choice is a regime bet, not a moral ranking of methodologies.
What funds actually offer
BITW and GDLC are market-cap products with concentration that matches the market. If your reason for buying an index was to escape bitcoin dominance, the wrapper did not solve that. European catalogues sometimes include equal-weight or thematic notes; read the methodology before assuming “index” means “balanced.”
Display series on this site include equal-weight constructions such as CI10. Those are benchmarks and trackers, not funds — see indexes you cannot buy.
Practical takeaway
- Count weights, not tickers
- Match the weighting scheme to the diversification you actually want
- Then compare fees, structure and rebalancing — not before
Frequently asked questions
Is equal weight “better”?
Better for breadth. Worse for turnover and for periods when bitcoin dominates. It is a different product, not a free upgrade.
Does capping fix concentration?
It reduces it. It does not remove directional crypto risk.
Where do BITW and GDLC fit?
Both sit on the market-cap end of the spectrum. Head-to-head: BITW vs GDLC.
Cryptoindex.ai publishes index data and market analysis for informational purposes. This is not investment advice. Digital assets are volatile and you can lose your entire investment.