S&P Dow Jones Indices launched five new cryptocurrency indexes on Tuesday, marking the company’s first significant expansion of its digital asset benchmarking tools since entering the market in May.
S&P Dow Jones Launch New Indexes
The world’s largest index provider, S&P Dow Jones Indices, announced the launch of five new cryptocurrency indices on Tuesday. In total, the organization presently has eight cryptocurrency indices.
A “broad digital market,” or BDM, index, which comprises over 240 coins, is the centerpiece of the tranche, according to a press statement. An S&P spokeswoman told CoinDesk, “The new subindices also provide multiple slices and dices of the BDM by market cap so that investors may watch different areas of the market.”
The “index is supposed to reflect a broad investable universe,” according to S&P’s website. Lukka, S&P’s crypto data partner, did not immediately answer to CoinDesk’s request for comment. According to CoinGecko, HXRO is the 240th largest cryptocurrency by market capitalization, while it’s unclear whether S&P’s selection criteria are based on size.
The second subset is the “S&P Cryptocurrency BDM Ex-Megacap Index” which excludes the constituents of the S&P Cryptocurrency Megacap Index. The crypto megacap index measures the performance of bitcoin and ethereum.
Another index being launched is the “S&P Cryptocurrency BDM Ex-Largecap Index” which excludes the constituents of the S&P Cryptocurrency Largecap Index.
The fifth index, the “S&P Cryptocurrency Largecap Ex-Megacap Index,” gauges the performance of the S&P Cryptocurrency Largecap Index’s components, excluding the S&P Cryptocurrency Megacap Index’s constituents.
The new indices are in addition to three other “S&P Digital Market Indices” that were launched in May. The “S&P Bitcoin Index,” “S&P Ethereum Index,” and the “S&P Cryptocurrency Megacap Index” are the three.
Peter Roffman, global head of Innovation and Strategy at S&P Dow Jones Indices, commented:
“The expansion of our Digital Market Indices family gives one of the broadest snapshots yet of this rapidly growing asset class with the ability to slice and dice by market cap. We’re excited to bring this significant level of additional transparency to the cryptocurrency market.”
Related article | S&P Dow Jones Launches Bitcoin And Ethereum Indexes
S&P Move Signals Wall Street’s Interest
Wall Street’s ambition to tame the Wild West-like crypto markets into a more digestible shape is reflected in the products’ “snapshot” perspective. These entrants, like S&P’s initial three crypto indices, employ points rather than prices to show market performance.
This methodology, according to S&P spokesman Ray McConville, better depicts asset appreciation over time. S&P’s mathematical procedure for computing index points is described in a methodology document published in July 2021.
The new indexes are as follows: Broad Digital Market, Crypto LargeCap, BDM Ex-MegaCap (BDM without bitcoin and ether), BDM Ex-LargeCap (BDM without the Large Caps) and Crypto LargeCap Ex-MegaCap.
Crypto market cap excluding BTC. Source: TradingView
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Featured image from UnSplash, charts from TradingView