S&P Dow Jones Indices’ three cryptocurrency indexes—SPDR Bitcoin (ticker: BTC), SPDR Ethereum (ETH), and SPDR Ethereum Classic (ETC) are now available on Bloomberg Terminal. The new indexes are designed to offer a view into the performance of the world’s largest cryptocurrencies.
After a six-month beta period, S&P Dow Jones Indices has brought out three new crypto-related indexes. The first new crypto-related index was launched on Monday, and it’s based on the Bitcoin price. The S&P Crypto Portfolio Total Return Index seeks to track the performance of the total return of Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin and Monero.
Despite the fact that the prices of cryptocurrencies halved about two months ago, there seems to be no brake on cryptocurrency adoption. You certainly feel the difference from 2018, when all the media was proclaiming the death of the industry and the bursting of the bubble.
Institutional investors continue to buy and new cryptocurrency-related products continue to appear. The most recent example of this was yesterday, the 14th. July, when S&P Dow Jones Indices expanded its participation in the cryptocurrency market by introducing new indices that will measure the performance of the broader cryptocurrency market.
New S&P Dow Jones IndicesDetails
S&P Dow Jones Indices has apparently just launched what it calls the S&P Cryptocurrency Broad Market Digital Index (BDM). It is a large index that consists of a number of other sub-indices and provides a general overview of the cryptocurrency market. Of course, the index does not represent the entire crypto sector, as it is composed of nearly 11,000 coins and tokens.
At launch, it was over 240, which is still a lot. There are also several additional, more limited measures of the cryptocurrency market within the BDM. These include subsets of indices such as the S&P Cryptocurrency LargeCap Index, the S&P Cryptocurrency BDM Ex-MegaCap Index, the S&P Cryptocurrency BDM Ex-LargeCap Index and the S&P Cryptocurrency LargeCap Ex-MegaCap Index.
The first, the S&P Cryptocurrency LargeCap Index, measures the performance of coins with the largest market capitalization. The following table measures the broader digital market, but without Bitcoin and Ethereum. A third index, the S&P Cryptocurrency BDM Ex-LargeCap, also measures the broad cryptocurrency market, but it excludes not only BTC and ETH, but also other currencies with the largest market capitalization.
Finally, the last indicator measures the performance of the assets with the largest market capitalization, but excluding BTC and ETH.
Crypto indices continue to gain ground
Peter Roffman, global head of innovation and strategy at S&P DJI, commented on this new move. He said the company was excited to bring this level of transparency to the cryptocurrency market and begin offering one of the broadest cuts of the asset class. The company is impressed with the growth of the cryptocurrency industry and its assets, which have grown faster in 2021 than at any time in history.
Of course, this is not the first time something similar has been created, as there was already a list of digital market indices measured by S&P. However, the new indices have significantly expanded that list and offer more transparency, Roffman noted. Examples of existing indices include the S&P Bitcoin Index, the S&P Crypto Mega Cap Index and the S&P Ethereum Index.
However, it should be noted that both the new and old Digital Market Index use the same source of cryptocurrency data – a data provider called Lukka. Nevertheless, the addition of new indices will provide additional insight and certainty for investors interested in the cryptocurrency space. They will provide reliable data, mitigate risk, and help traders and investors be a little better prepared for the volatility of the cryptocurrency industry.
The cryptocurrency industry continues to struggle
This move shows once again that some of the biggest players have a genuine interest in the cryptocurrency sector, which continues to encourage companies to bring new products to market. Meanwhile, the cryptocurrency sector is still struggling with falling prices since mid-May.
There have been a number of developments in the sector that are not exactly encouraging, including Tesla’s decision to stop accepting payments in BTC, China’s new crackdown on bitcoin miners, and more. Bitcoin itself is currently trading in the red, despite recent rumors that Apple has made a large investment and may announce it soon.
Since the rumors have not yet been confirmed, there is no incentive for users to reinvest and further increase the price of the part. Bitcoin is currently slightly below its highest support level of $32,000, although a recovery from that level and possibly a return to $36,000 is still possible as BTC has moved between these levels over the past month.