Thursday, February 9, 2023

The creator of the FTSE100 launches indices for crypto

FTSE Russell, creator of the FTSE100 stock index, has released a series of indexes whose constituents are digital assets, according to a press release released via its website on Nov. 29. The series has been produced in cooperation with Digital Asset Research. FTSE Russell is a subsidiary of the London Stock Exchange.

The 2022 performance of the FTSE Digital Asset Index – Large/Mid, as stated in the index’s fact sheet

Indexes have been used in the stock market throughout its history to track particular areas of the market. But there were relatively few made up of cryptocurrencies prior to 2021.

The FTSE Digital Asset Index series appears to be the first issued by a company based in the United Kingdom It joins the list of crypto indexes that have been released by United States and German companies since early 2021, including the S&P Cryptocurrency Index series, the Nasdaq Crypto Index, and the CMC Crypto 200 Index series by Soloactive.

The new series contains eight indexes total, including one each for large cap, mid cap, small cap and micro cap coins, as well as four indexes that combine coins from multiple market cap sizes. The company has not released a list of constituents for each index yet, but it has released a fact sheet for each one showing performance data for Q1-Q3, 2022.

In the press release, Arne Staal, CEO at FTSE Russell, argued that the new indexes will help to bring transparency to the crypto market, stating:

“FTSE Russell has taken a measured approach to this frontier investment space and has built a rigorous and transparent framework, underpinned by robust governance and comprehensive data to meet investor needs, both where they are now and as they prepare for change in this market.”

According to the company’s website, the new indexes rely on a standardized set of 21 criteria to determine which institutions can be counted on to prove accurate pricing data. Once a set of institutions is decided on, the price data from these institutions is used to determine which coins go in each index and to determine the overall performance of the index.