What does Bitcoin Price Index mean?
In the early days of Bitcoin it was difficult, if not nearly impossible, for holders of the coin to determine how much their coins were worth. The value of Bitcoin versus other currencies was different from one exchange to the next, and sometimes dramatically so.
This prompted the cryptocurrency news organization, Coindesk, to fix the situation by creating the Bitcoin Price Index (BPI). This index polls the largest, most established cryptocurrency exchanges, aggregates the data, and then applies the aggregated data to show a balanced and realistic picture of Bicoin’s value.
The BPI is based on a set of criteria, or rules, and any exchanges that don’t meet this criteria are not included in the BPI.
Because Coindesk has adhered to their own rules stringently over the years, the BPI has received an extremely strong reputation in the cryptocurrency trading world. Of course in 2018 the BPI is a bit passé as most exchanges no longer see wild variations in the prices quoted for Bitcoin against the major currencies of the world.