CoinDesk’s Bitcoin Price Index
The CoinDesk Bitcoin Price Index (XBX) is the world’s leading reference for the price of bitcoin, used by the largest institutions active in crypto assets. It is the crypto market standard, benchmarking billions of dollars in registered financial products and pricing hundreds of millions in daily over-the-counter transactions. Built for replicability and reliability, in continuous operation since 2014, the XBX is relied upon by asset allocators, asset managers, market participants and exchanges. The XBX is the flagship in a portfolio of single- and multi-asset indices offered by CoinDesk.*
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The CoinDesk Bitcoin Price Index (XBX) represents a real-time, USD-equivalent spot rate for bitcoin. The index value is algorithmically calculated once every second based on observed trading activity on leading exchanges. Formerly known as the TradeBlock XBX Index, the index has been in operation since April 2014 and was launched publicly on Nov. 3, 2014.
The XBX is designed as a reference rate to track liquidity while also adjusting for deviations caused by anomalies and manipulation attempts at individual exchanges. While the precise formula underlying the index is proprietary, the key elements of the algorithm are outlined below.
Exchanges with greater liquidity receive a higher weighting in the index, increasing the ability to execute against the index in the underlying spot markets. Liquidity weighting also mitigates the impact of volume spikes during off-peak trading hours.
Price Variance Weighting
The index price reflects data points that are discretely weighted in proportion to their variance from the rest of the cohort. As the price at a particular exchange diverges from the rest of the data points, its influence on the index consequently decreases.
The algorithm penalizes stale ticks on any given exchange. If an exchange does not have recent trading data, its weighting is gradually reduced, until it is de-weighted entirely. Similarly, once activity resumes, the corresponding weighting for that constituent is gradually increased until it reaches the appropriate level.
Benefits of the CoinDesk Bitcoin Price Index (XBX)
- Manipulation resistant: Automatically discounts manipulation attempts and market anomalies.
- Real-time: Responsive to market movements, while maintaining overall stability.
- Maximum replicability: Real-time weighting feeds available for replication in spot markets.
- Reliable APIs: 99.9999% XBX Index uptime recorded since 2015.
- Compliance: Index algorithm & governance based on IOSCO financial benchmark framework.
- Fully auditable: Historical exchange prices and weightings stored for every data point.
- The recognized market standard: Widely recognized as the highest-performing index for funds, derivatives and OTC trading.