S&P Dow Jones Indices has recently made it public that the enterprise is going to introduce cryptocurrency benchmarks. The joint venture group is one of the largest index services providers in the world. The company was founded in 2011 after the CME Group, News Corp, and S&P Global merger took place.
In the beginning, the company would be working on a new series called the S&P Bitcoin index, Ethereum Index, and Cryptocurrency MegaCap Index. These new indices would track the progress and development factors for Bitcoin and Ethereum. Lukka would facilitate the backup support and pricing data solutions. Lukka is a data service that provides custom software and middle plus back-office digital asset statistics.
The S&P Dow Jones Indices has thus far announced benchmark series for two of the largest cryptocurrencies, i.e., Bitcoin and Ethereum. However, the financial services would start working on more cryptocurrency indices very soon. According to the firm management, blockchain projects with a large market cap, and broad market exposure would be the top choices for benchmark expansion.
Data projections from CoinMarketCap show that Bitcoin is the leading cryptocurrency with a liquid market cap of $1.04 trillion, while Ethereum is runner up at about $395 billion. The closest competitor to two top-tiered crypto leads is Binance coin which is currently placed at $95 billion. With the help of these indices, financial institutions can start launching personalized crypto derivatives.
S&P Dow Jones Indices can Play a Vital Role in Reviving the Deflating Bitcoin Markets
Peter Roffman, Global Head of Innovation and Strategy at S&P Dow Jones Indices, told the media that under the current economic pretext, the cryptocurrency markets and traditional financial markets have started to lose their distinctive streams and become more synonymous with unison. The presence of qualified, reliable, and transparent benchmarks that institutional experts review has become a necessity as cryptocurrencies are getting better market adoption.
Thus far, SEC has not approved any Bitcoin-tied ETF. The Grayscale Crypto Trusts have started to lose their value in the market in the current situation. However, the S&P Dow Jones Indices offering could encourage institutional adopters who are seeking exposure in cryptocurrencies. These digital market indices could take the form of a staple for conventional financial services providers.