How S&P Dow Jones Crypto Indices Launch Will Change the Bitcoin Industry?
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How S&P Dow Jones Crypto Indices Launch Will Change the Bitcoin Industry
S&P Dow Jones Indices has announced plans to launch “global crypto-asset indices” as early as next year. This event can become a powerful impetus for the cryptocurrency market.
S&P Dow Jones Indices is a joint venture between S&P Global, Dow Jones & Company, and CME Group. It manages tens of thousands of stock indices.
“As cryptocurrencies are rapidly evolving as a separate asset class, it is time for independent, reliable, and friendly reference points” – said Peter Roffman, head of innovation and strategy at S&P Dow Jones Indices.
For cryptocurrency products, the company uses data from the Lukka analytical platform, which monitors the prices of 550 cryptocurrencies in real-time. Lukka recently closed a $ 15 million Series C funding round led by S&P Global and State Street asset manager.
Lukka collects data on stock market standards and its products meet institutional level requests. The company is said to have developed the “world’s first” methodology for pricing crypto assets based on “fair market value.”
What is the value of Crypto Indices?
The launch of cryptocurrency indices from S&P Dow Jones Indices will become a real basis for the creation of bitcoin-based ETFs, in which the largest players in the financial market are used to investing.
Indices measure the general state of the market or industry and track the dynamics of prices for various types of assets, as well as their baskets, formed according to some common criteria.
Indices allow active investors to compare the performance of their actions with the broader market and determine the success of a strategy.
There is also a large category of passive investors who do not seek to overtake the market in terms of profitability but make money on its real dynamics. This includes both individual investors and investment organizations that follow conservative, low-risk strategies such as pension funds or asset managers. For passive investors, indices are replacing trading strategies.
In the last decade, the value of indices has grown significantly, as, after the 2008 crisis, many financial companies have reoriented to passive investment strategies.
Indices also serve as the basis for the selection of underlying assets in the various index funds that are listed on exchanges. These funds make it easier for investors to access an asset or a basket of assets and are increasingly popular.
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