The S&P Dow Jones announced this week the inclusion of five new crypto indices, including an index that tracks over 240 coins. The indices join legacy financial indicators that were paramount in traditional markets, such as the S&P 500 and the Dow Jones Industrial Average.
The focus of the five new indices is the S&P Cryptocurrency Broad Market Digital Index (BDM). This index is designed to provide a broad snapshot of the crypto market and is the index that tracks a whopping 240 coins when it was launched. There are currently approximately 275 cryptocurrencies with a market capitalization of more than $ 100 million. However, the S&P Dow Jones has not disclosed whether market capitalization will dictate the selection criteria, at least for the BDM index.
The S&P Dow Jones first announced its intention to track crypto prices as recently as December 2020 and only released the price tracking indices for Bitcoin and Ethereum a few months ago.
The remaining four indices are BDM derivatives, which include:
- Cryptocurrency LargeCap Index: A BDM subgroup that focuses on selected coins with the largest market caps.
- Cryptocurrency BDM Ex-MegaCap Index: A BDM subset that excludes Bitcoin and Ethereum.
- Cryptocurrency BDM Ex-LargeCap Index: A BDM subset that excludes the aforementioned Crypto LargeCap Index.
- Cryptocurrency BDM LargeCap Ex-MegaCap-Index: A BDM sub-group that contains the above-mentioned LargeCap-Index and excludes the already established MegaCap-Index.
The indices join the ranks of early digital asset benchmarks already established by S&P Dow Jones, including the S&P Bitcoin Index, the S&P Ethereum Index, and the S&P Cryptocurrency MegaCap Index.
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The what, how and why
The indices will get price data from their already established cryptocurrency partner Lukka, a provider of crypto software and enterprise-grade data. Rising indices around crypto reflect significant growth in consumer demand that the S&P Dow Jones is now looking to address. “The market for cryptocurrency assets continues to grow, making transparent benchmarking and index-based solutions based on crypto and blockchain assets more important than ever,” says the S&P Dow Jones press release.
Peter Roffman, Global Head of Innovation and Strategy at S&P Dow Jones Indices, said in the press release: “For more than a century, our indices have provided insight into how markets are performing. Now… let’s give that answer to cryptocurrency investors, ”adding that the indices“ provide one of the most comprehensive snapshots yet of this fast-growing asset class with the ability to roll by market capitalization. We are pleased to bring this significant amount of additional transparency to the cryptocurrency market. “
Despite a healthy pullback in recent months, the broad market growth of crypto at large is clearly realized by the S&P Dow Jones Indices. | Source: CRYPTOCAP-TOTAL on TradingView.com
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