Just to shed more light about Bitcoin, I will start by explaining what Bitcoin is. This currency was introduced some years back and has been rising in terms of usage. Many people and institutions are embracing the digital currency use as the use of the currency is improving in terms of technology and its services day by day. It utilizes the blockchain technology and also the price has been made standard in that there is it has been shown that it is actually economical to make transactions using the bitcoins.
About the Bitcoin Index
The Bitcoin price index was launched a few years ago and has offered a lot of advantages to the Bitcoin users. The Bitcoin price index is usually reached at by evaluating some of the prices from the top exchanges and getting the average. This is very beneficial for traders, institutions and any other person who is willing to operate with bitcoins since they have a standard price at which to operate.
Exchange governed by the index
The Bitcoin price index has been made standard and it is utilized in a number of exchanges internationally. There is a criteria for any exchange to be included in the XBP. The USD exchanges are usually supposed to offer a base for customers globally. It also states that there should be provision of offers for sales which are usually immediate and again the exchange that is usually allowed is supposed to involve a minimum of around $1500 and not less than that amount. For any exchange to qualify, it should be at least 5% of the total or cumulative exchanges through a period of 30 days. Lastly, the transfers involved should not take more than a couple of days. There are few exchanges that meet these Bitcoin price index criteria and they include the following
Why it is not weighted
The use of bitcoin market price usually lacks liquidity in various regions and therefore, it was important to establish a simple average price to work on rather than using a volume-weighted one. The simple one would help to act as a global indicator since the exchange does not happen in an equal manner in several countries. A simple one is beneficial in that it help to eliminate some of the common irregularities that usually happen.
In conclusion, the benefits of the establishment of Bitcoin price index cannot be underestimated.