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Summary
- S&P Dow Jones has launched a new series of digital asset benchmarks, further cementing the digital asset class as a mainstream option for investors.
- The move comes as investor demand for index-based solutions continues to grow amidst the rapid growth of crypto as an asset class.
- Crypto’s push to the mainstream was further established in April when popular crypto exchange, Coinbase, made its public debut on Wall Street.
A new series of digital asset benchmarks, called the S&P Digital Market Indices, has been officially launched on the world’s leading index, the S&P Dow Jones Index. This further cement the digital asset class of cryptocurrency as a mainstream option for investors.
The new branded indices measure the performance of digital assets, including Bitcoin, Ethereum and a combination of the two.
Source: © Tpophoto | Megapixl.com
DO READ: S&P Dow Jones Indices test the waters in digital assets
New Crypto Index to Tame “Wild West” Crypto Markets
The current index series includes the S&P Bitcoin Index, S&P Ethereum Index and S&P Crypto Mega Cap Index. The Bitcoin Index tracking Bitcoin, the Ethereum Index tracking Ethereum and the Cryptocurrency MegaCap Index tracking the combination of both Bitcoin and Ethereum. Additional altcoins are expected be included in the S&P Digital Market Indices later this year according to S&P Global.
The pricing of individual constituents will be provided by crypto software and data provider Lukka Incorporated.
The move comes as investor demand for index-based solutions continues to grow amidst the rapid growth of crypto as an asset class, particularly that of Bitcoin and Ethereum, the largest and the second-largest cryptocurrencies, respectively.
The hope for investors is that index-based solutions will make it much simpler to analyse as well as access crypto whilst simultaneously minimising the complications currently inherent in the trading of the digital asset class, which is notoriously volatile and rife with speculation.
Global Head of Innovation and Strategy at S&P Dow Jones Indices, Peter Hoffman, says that the move will allow for greater transparency concerning cryptocurrency, resulting in investors having access to reliable benchmarks supported by institutional quality pricing data.
Index Performance
On 4 May 2021, the S&P Bitcoin Index closed at US$7,278.31, with an impressive 87.11% YTD return. The S&P Ethereum Index ended at US$30,396.87, having grown 357.86% since the start of 2021.
The S&P Crypto Mega Cap Index stood at US$5,720.79 at the end of the session on 4 May. The index has generated a massive gain of 123.93% this year.
GOOD READ: Ethereum creator becomes a billionaire at just 27 as the crypto price surges
Crypto’s Shift into Mainstream
The news of the launch comes on the back of Canada’s recent decision to launch two cryptocurrency exchange-traded funds (ETF), allowing investors to take long and short positions on cryptocurrencies. This is yet another step towards transferring the once-obscure asset class to a more mainstream audience.
The primary benefits for investors are security and convenience. Whereas crypto investors traditionally must set up a crypto wallet while dealing with unregulated exchanges, ETFs allow investors to bypass those hurdles and engage in the crypto market with a sense of assurance.
Crypto’s push to the mainstream was further established in April when popular crypto exchange, Coinbase, made its public debut on Wall Street. In the wake of this announcement, Bitcoin reached a then-record high with many other altcoins following suit.
Coinbase recently made its debut on Wall Street (Source: © Tpophoto | Megapixl.com)
In that vein, it would not be unreasonable to suggest the recent move by S&P Dow Jones could have the same impact.
