Why the Index Number You See Free Is Not the One Funds Pay For

Look up the Nasdaq Crypto Index on a free site and you will get a number. Look it up on a Bloomberg terminal and you will get a different one. Neither site is broken.

The free number is almost always a reconstruction: someone took the published methodology, applied it to public price data, and produced a series that approximates the real thing. The paid number is the official print, calculated by the administrator, sold under licence, and legally usable as the reference value for a financial product.

We publish reconstructions ourselves and label them as such, so this is a subject we have some skin in. Here is how the two differ and when the difference actually matters to you.

What a Licensed Print Actually Is

An index administrator does not just publish a number. They sell a package, and most of the package is not the number.

A guaranteed calculation. Computed at stated intervals from stated sources, with published contingency procedures for when an input is unavailable.

Governance. A committee that reviews constituents, approves methodology changes, and documents decisions. The Nasdaq Crypto Index has an oversight committee that must approve any material change and reviews the methodology at least annually, with each constituent reviewed at least once in any twelve-month period.

Legal usability. The right to reference the index in a fund prospectus. This is the part that costs money and the part nobody outside the industry thinks about.

Continuity. A commitment that the series will still exist, calculated the same way, in ten years.

A reconstruction gives you the first item, approximately. It gives you none of the other three.

Where the Numbers Diverge

Four reasons a reconstruction drifts from the official print, roughly in order of impact.

Price sources. The administrator uses a specific set of venues, often with a volume-weighted composite and rules for outlier exclusion. A reconstruction typically uses whatever public API is available. On calm days the difference is small. On a day when one venue prints badly, it is not.

Supply data. Free-float market cap depends on circulating supply, and supply figures differ between data providers. They also update on different schedules. Two people applying the same weighting rule to different supply numbers get different weights.

Timing. Official prints are calculated at defined moments. The CoinDesk 20 updates every five seconds. Reconstructions sample whenever they sample. Comparing two series taken at different instants during a volatile hour produces a gap that has nothing to do with methodology.

Rebalance implementation. The official index applies constituent and weight changes at an exact published moment. A reconstruction applies them whenever its own pipeline runs. Around reconstitution dates this is where reconstructions diverge most.

Those four compound. A well-built reconstruction of a large-cap index tracks the shape of the official series closely and will still differ on the level, sometimes by more than you would expect.

When the Difference Matters

Honest answer: less often than you would think, and then suddenly a lot.

It does not matter when you want to know which way an index moved this week, whether one benchmark is outperforming another, or how a methodology behaves across market regimes. A reconstruction answers all of that.

It matters enormously when the number is the reference value for a contract. A fund's net asset value, a structured product's payout, a futures settlement. In those cases the licensed print is not a better estimate of the truth. It is the truth, by contractual definition, and a reconstruction that is 0.3% away is simply wrong for that purpose.

That is the cleanest way to think about it. A reconstruction is a measurement. A licensed print is a definition.

Why Anyone Bothers Reconstructing

Three reasons, all legitimate.

Licensing is expensive and restrictive. Redistribution rights for index data are priced for financial institutions. A site showing charts to readers cannot generally afford, or contractually obtain, the right to display official prints for a dozen benchmarks.

Coverage. Many well-designed indexes have no public feed at all. Without reconstruction, they are invisible to anyone outside a terminal subscription.

Comparison. Seeing a dozen benchmarks on one screen requires them all to exist on that screen. Reconstruction is the only route to that.

The obligation that comes with it is disclosure. A reconstruction should say what it is, what data it uses, and that it is not the official print. Presenting a proxy as the real thing is misleading, and in some jurisdictions it is a trademark problem on top.

Benchmark Regulation Sits Behind All of This

The reason licensed prints carry so much structure is not tradition. It is regulation.

After the LIBOR manipulation cases, benchmark administration became a regulated activity in several jurisdictions. The EU Benchmarks Regulation and the IOSCO principles impose requirements on governance, conflicts of interest, input data quality, methodology transparency and change procedures.

That is why an administrator publishes an oversight committee, contingency procedures and a change process rather than just a number. Those things are the product.

A reconstruction sits entirely outside that framework. Which is fine, as long as it is not pretending otherwise.

What to Check Before Using Any Index Number

Four questions, quick to answer.

• Is this the official print or a reconstruction? Reputable sites say so. If a site does not say, assume reconstruction.
• If reconstruction, what are the price sources? Published sources mean the series is auditable. Unpublished sources mean it is not.
• Does the level matter for what you are doing, or only the direction? For most reading, direction is enough and a proxy is fine.
• If the level matters, are you looking at the source of record? For anything contractual, only the administrator's own publication counts.

Our Own Position

We publish two kinds of series and keep them separate deliberately.

Our own display indexes, CI100 and the rest, are ours. We define the rules, we publish them, and they are display indexes rather than funds or licensed benchmarks.

For third-party indexes we publish either the official print where a public feed exists, or a transparent market-cap proxy where it does not, labelled as a proxy on every page. The Nasdaq Crypto Index page and the Coinbase 50 page both carry that notice at the top of the chart.

The general point is worth carrying past this site. In financial data, "free" and "paid" versions of the same number are usually not the same number, and the gap is rarely about quality. It is about what the number is legally allowed to be used for. Knowing which one you have in front of you is most of knowing what you can do with it.

Frequently asked questions

Is the free index number the official print? Usually not. A free chart is almost always a reconstruction from public prices. The official print is calculated by the administrator and sold under licence.

When does the gap between proxy and licensed print matter? It barely matters if you are reading direction or comparing methodologies. It matters completely if the number is the reference for a NAV, a payout or a settlement. Then only the licensed print is the definition.

Why reconstruct indexes at all? Licensing is priced for institutions, many indexes have no public feed, and a comparison screen needs every series to exist on that screen. Reconstruction is how those three problems get solved. The duty is to label it.

Are Cryptoindex.ai series official prints? Our own baskets are display indexes we calculate. Third-party names are either the official public print, where a feed exists, or a labelled market-cap proxy. They are not a licence to use the administrator’s number in a product.

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Cryptoindex.ai is not affiliated with any index administrator named here. Proxy series are independent reconstructions from public data and are not official index values. Nothing on this page is investment advice.