Rev. Date September 20, 2022

Purpose:

This article is intended to provide relevant information to help subscribers understand the basics of available cryptocurrency data on Venn.

Definitions:

  • Cryptocurrencies, such as bitcoin, are digital assets or currencies that are based on a decentralized, open-source peer-to-peer protocol through a public ledger (such as blockchain). Cryptocurrencies can be issued by anyone and their value is generally not backed by anyone. Instead, a decentralized network maintains the protocols and the supply is constrained by the protocol where trading or transfers are recorded on the ledger. Cryptocurrencies are an evolving area of law, and depending on various factors, may be considered to be “securities” by various regulatory bodies. Nevertheless, they are currently subject to fewer regulatory protections and are subject to a greater risk of loss than securities or government-backed currencies. As a result, investments in cryptocurrencies are considered to be highly speculative and volatile.

  • Reference Rates are return streams that are created by aggregating different crypto prices across various exchanges into one time-series for each coin or other digital asset.

Certain Additional Risks: Cryptocurrencies are an emerging asset class with a limited history. Cryptocurrencies have experienced extreme volatility and many are less liquid and not as easily traded as other, more traditional asset classes. While Venn includes information for cryptocurrencies and related products (including futures), certain analytics and/or metrics could be unavailable for cryptocurrencies and related products and Venn should not be expected to operate as effectively in evaluating cryptocurrencies. In particular, factor-based analyses can be less effective for cryptocurrencies (and related products) as the amount of return and risk that is unexplained by a given risk factor is likely to be higher for cryptocurrencies (and related products) than for other asset classes (given, among other things, the limited history and volatility discussed above). This could result in the Venn algorithm viewing such cryptocurrencies (and related products) differently, and potentially less effectively, than other investments for any factor based analyses.

This document highlights certain aspects of this feature. It does not discuss all material facts or assumptions. Please see Important Disclosure and Disclaimer Information.

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