United States, Dec. 3, 2020 /AlexaBlockchain/ – S&P Dow Jones Indices today announced that it will launch cryptocurrency indices in 2021, making it the latest major finance company to enter the nascent asset class.
S&P Dow Jones Indices is a division of financial data provider S&P Global Inc. It provides investable and benchmark indices to the financial markets.
The S&P DJI-branded products will use data from New York-based virtual currency company Lukka on more than 550 of the top traded coins, the companies said.
S&P DJI will provide S&P DJI-branded and customized indexing and benchmarking solutions supported by Lukka’s proprietary crypto asset pricing data.
S&P’s clients will be able to work with the index provider to create customized indices and other benchmarking tools on cryptocurrencies, S&P and Lukka said in a joint statement.
How does Crypto Index help?
By observing a crypto index, traders can zero in on what the broader market is doing, in terms of both price fluctuations and also trading activity. This saves interested parties some time and energy when they research the digital currency markets.
S&P and Lukka hope more reliable pricing data will make it easier for investors to access the new asset class, and reduce some of the risks of the very volatile and speculative market, they said.
Peter Roffman, global head of innovation and strategy at S&P Dow Jones Indices, commented:
“With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks. With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks. We’re excited to work with Lukka, who has been at the forefront of digital asset data services, to promote more transparency in this nascent sector.”
Robert Materazzi, CEO of Lukka, said:
“Our collaboration with S&P DJI is yet another milestone that bridges the gap between the crypto asset ecosystem and traditional financial services. Customers with crypto data requirements will soon have access to the most trusted data in the industry underpinned by Lukka’s institutional-quality standards, such as AICPA SOC Controls. In a rapidly maturing industry, it is paramount to build to institutional standards when working with highly respected brands, such as S&P DJI.”
The entry of such reputed financial institutions is going to further strengthen the position of cryptocurrency as an investment option, and it could help cryptocurrencies become more mainstream investments.
Bitcoin was trading at $19,300 in latest trading on Thursday, having soared around 170% this year.
Cryptocurrencies have been around for more than a decade, but have started attracting more interest from large financial companies over the last few years.
Large firms including Fidelity Investments and Japan’s Nomura Holdings Inc have starting safeguarding bitcoins and other cryptocurrencies for institutional investors, while major exchanges have started offering bitcoin derivatives.
The emergence of more mainstream market infrastructure has made the asset class more accessible for institutional investors, with hedge fund managers such as Paul Tudor Jones and Stanley Druckenmiller saying they include bitcoin in their broad investment strategies.