8 Questions to Ask Before Buying Any Crypto Index

8 Questions to Ask Before Buying Any Crypto Index
Token Metrics Team • October 2025 • ~6 min read

Introduction
Not all crypto indices are created equal. Some are transparent and rules-based. Others are opaque, expensive, and poorly constructed. Before you commit capital, ask these eight questions.
TL;DR
Ask about: Selection rules, rebalancing frequency, fees, custody, regime switching, transparency, tax treatment, and track record
Red flags: Vague rules, hidden fees, custodial risk, no downside protection
TM Global 100: Transparent answers to all eight questions
Question 1: What Are the Selection Rules?
Why it matters: You need to know exactly what you're buying.
Bad answer: "We pick the best tokens based on our analysis."
Good answer: "Top 100 assets by market cap, updated weekly, with exclusions for stablecoins and wrapped assets."
TM Global 100 answer: Top 100 by market cap, excluding stablecoins. No discretionary overrides. Rules published in the strategy modal.
Question 2: How Often Does It Rebalance?
Why it matters: Infrequent rebalancing = stale portfolios, concentration risk, and missed opportunities.
Bad answer: "Quarterly or when we feel it's needed."
Good answer: "Weekly rebalancing every Monday at 12pm UTC, plus regime-based switches."
TM Global 100 answer: Weekly rebalancing to maintain top-100 weights. Full log of every rebalance available.
Question 3: What Are All the Fees?
Why it matters: Hidden costs destroy returns over time.
Ask about:
Management/platform fee
Trading fees/commissions
Gas fees
Performance fees
Slippage estimates
Bad answer: "Low fees" (with no specifics)
Good answer: "1.5% annual platform fee, gas fees shown pre-trade, maximum 0.5% slippage cap."
TM Global 100 answer: All fees disclosed upfront before you confirm. Estimated gas, platform fee, max slippage, and net value shown in the checkout flow.
Question 4: Who Controls the Assets?
Why it matters: Custodial risk is real. FTX, Celsius, and Voyager all collapsed, taking user funds with them.
Bad answer: "Your assets are held securely" (no details on custody)
Good answer: "Self-custodial smart wallet. You control your keys and funds. Not held by any third party."
TM Global 100 answer: Embedded self-custodial wallet. You retain full control of assets.
Question 5: Is There Downside Protection?
Why it matters: The top 100 can drop 70%+ in bear markets. Sitting through that is brutal.
Bad answer: "Diversification reduces risk" (but doesn't avoid downside)
Good answer: "Regime switching to stablecoins during bear markets based on [specific signal]."
TM Global 100 answer: Proprietary market-regime signal. When bearish, the index exits tokens and moves to stablecoins. Signal logic explained in strategy docs.
Question 6: Can You See All Holdings and Transactions?
Why it matters: Without transparency, you can't verify performance or trust the process.
Bad answer: "Holdings are available on request."
Good answer: "Real-time treemap, table view, and transaction log. Every rebalance and trade visible on-chain."
TM Global 100 answer: Gauge → Treemap → Holdings Table → Transactions Log. Full visibility into what you own and how it changes.
Question 7: What's the Tax Treatment?
Why it matters: Frequent rebalancing creates taxable events.
Ask about:
How many trades per year?
Does the structure optimize for tax efficiency?
Are there jurisdiction-specific versions?
Bad answer: "Consult your tax advisor" (with no context)
Good answer: "Weekly rebalancing creates ~52 events annually. We provide transaction logs for easy reporting. Tax treatment varies by jurisdiction."
TM Global 100 answer: ~52 weekly rebalances plus regime switches. Full transaction logs with timestamps and trade details for tax reporting.
Question 8: What's the Track Record?
Why it matters: Backtests can be overfitted. Real trading history shows how the strategy performs in practice.
Ask about:
Backtest results
Live performance (if available)
Maximum drawdown
Performance vs. alternatives (e.g., Bitcoin, equal-weight top 10)
Bad answer: "Projected returns of 50%+ annually" (with no risk disclosure)
Good answer: "Backtested +74% in 2024 with -28% max drawdown vs. +65% buy-and-hold with -38% max drawdown. Live tracking begins at launch."
TM Global 100 answer: Backtested methodology available in strategy docs. Live performance tracking available post-launch in the platform.
Red Flags to Avoid
🚩 Vague selection rules ("we pick quality projects")
🚩 No rebalancing schedule
🚩 Hidden or unclear fees
🚩 Custodial wallets (you don't control keys)
🚩 No downside protection strategy
🚩 Opaque holdings
🚩 No transaction history
🚩 Unrealistic return promises with no risk disclosure
Green Flags to Look For
✅ Specific, rules-based selection criteria
✅ Regular, scheduled rebalancing
✅ All-in fees disclosed upfront
✅ Self-custodial architecture
✅ Regime switching or downside mitigation
✅ Real-time transparency of holdings
✅ Full transaction logs
✅ Realistic expectations with risk warnings
How TM Global 100 Scores
Question
Score
Selection rules?
✅ Top 100 market cap, transparent
Rebalancing frequency?
✅ Weekly + regime switches
All fees disclosed?
✅ Yes, shown pre-trade
Custody model?
✅ Self-custodial
Downside protection?
✅ Regime switching
Holdings transparency?
✅ Real-time treemap + log
Tax clarity?
✅ Full transaction logs
Track record?
✅ Backtests + live tracking

Conclusion
Before buying any crypto index, demand answers to these eight questions. Vague responses, hidden fees, or custodial risk should send you running.
TM Global 100 passes all eight tests with transparent, auditable, self-custodial structure.
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