What is Red Hare NFT Index and how reliable is it?

The world of cryptos can be a little different from what it appears on its face. This is the reason why due diligence can be the best friend. After the fall of TerraUSD, and of crypto lending and borrowing projects such as Celsius and Voyager, the focus is again on due diligence.

Take, for example, a presently trending blockchain project, Aptos Labs. It is in news because of the multi-million-dollar funding it has recently raised during a Series A round led by FTX ventures. But underneath are some concerns like Aptos’ founder, formerly part of Facebook’s Diem crypto project, facing a billion-dollar lawsuit. Aptos is a very young company and is into Layer 1 solutions.

In the NFT verse, Red Hare Analytics, which claims to be a Web 3.0 NFT data analysis company, is trending. Let us explore.

What is Red Hare NFT Index?

Red Hare is into NFT data analysis, and it claims to fully capture price trends and other financial moves in the NFT space. The company is said to have launched Asia’s first index dedicated to NFTs in May this year. What it does is track price movements of a “chosen group” of NFT projects. It claims to provide a reliable indicator of how the NFT sector is performing in terms of sales activity.

Another primary service is helping with NFT exchange traded funds (ETFs). Red Hare states that it supports financial platforms in creating ETFs. ETFs are usually a basket of multiple assets, with tracking of a particular index, and in this case, it would be Red Hare’s NFT Index. As of writing, the index is reflecting a 24-hour dip of nearly 7%. The index’s top constituent NFTs include CryptoPunks, BAYC, and Meebits.

According to a recent press release by BOA Financial Group, the Hong Kong-based company has partnered with Red Hare to expand the reach of the latter’s NFT index.

Is Red Hare NFT Index reliable?

The NFT market is very wide, mirroring the cryptoverse, which has tens of thousands of assets. New NFTs can be launched any day, and recent big entrants were Hot Wheels, LimeWire Originals, and Alec Monopoly. The Red Hare NFT Index tracks 44 constituents according to its factsheet, and the list includes games and metaverses.

The other concern is that Red Hare has been partnering with new NFT projects, like Yuliverse and DeLotty, of late for launches and giveaways, which might raise eyebrows.

Data provided by CoinMarketCap.com

Bottom line

Red Hare is a new entrant, having started its NFT Index in May 2022. NFTs in themselves are very wide, with a new launch happening every other day. Moreover, prices of NFTs have remained very subdued this year, with most releases including that of Madonna failing to attract high bids. How the Red Hare NFT Index and related ETFs perform in the long term is a wait-and-watch game.

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