What is the Crypto Economic Index (CEI) report?
The Crypto Economic Index (CEI) Report examines all activities of a crypto-asset. The CEI measures changes to the average level of network activities and audited activities. The Cryptocurrency Investment Research Corporation (CIRCO) reports the CEI monthly to provide an analysis of the crypto-assets strength, volatility, and valuation. Essentially the CEI Report attempts to measure a degree of optimism or pessimism based on the crypto-asset’s activity.
How to read the Crypto Economic Index (CEI) indicator:
Positive Index Level:
- High levels of activity which includes the number of transactions, number of crypto-assets sent, number of block rewards, and number of fees paid.
- The network is experiencing an increase in volatility.
- Manipulative activities may have taken place on the market.
- The market may experience long-term volatility (uptrend or downtrend).
Baseline Index Level (0%):
- A balanced range that indicates activities are within normal levels.
- The network is experiencing low volatility.
- The market will possibly experience low volatility or steady trends.
- The network strength ratio is balanced and stabilized.
Negative Index Level:
- Low levels of activities which includes the number of transactions, number of crypto-assets sent, number of block rewards, and number of fees paid.
- The network is experiencing a decrease in usage and strength.
- The market may be vulnerable to upcoming manipulative activities.
- The market may experience short-term price swings (uptrend or downtrend).
A break-down of the CEI Report
The monthly average level of network activities and network earnings involve the following:
- The average number of BTC sent.
- The average number of transactions.
- The average block reward.
- The average fees paid.
Audited Transaction Activities are anomalous transactions that occur on the network. CIRCO uses a rule-based algorithm to detect these activities, followed by a research-approach to finalize the best possible estimated audited activities level. However, audited activity levels are broken down into two categories:
- Audited Transaction Activities.
- One entity sending numerous transactions for the same funds/assets.
- Network spam.
- Cryptocurrency exchange conducting their protocols or operations.
- Daily-Time-Spread (DTS).
- The difference in the average number of transactions throughout the day.
- A low DTS is good because the network is used equally within 24 hours across.
- A low DTS possibly indicates equal usage across the globe.
The Crypto Economic Index (CEI) report is for informational purposes and to get a clear understanding of the overall general activities that occur on the crypto-assets network.