S&P Bitcoin Index (SPBTC) will track the performance of Bitcoin while S&P Ethereum Index (SPETH) will measure the performance of Bitcoin’s closest rival -- Ethereum. S&P Cryptocurrency MegaCap Index (SPCMC) will measure the performance of Bitcoin and Ethereum digital assets weighted by market cap.
In another development marking growing acceptance of cryptocurrencies in the mainstream financial world, index provider S&P Dow Jones Indices on Tuesday announced the official launch of its new series of cryptocurrency indices to measure the performance of digital assets listed on recognised open cryptocurrency exchanges. Bringing Bitcoin and Ethereum to Wall Street, S&P said S&P Bitcoin Index (SPBTC) will track the performance of Bitcoin while S&P Ethereum Index (SPETH) will measure the performance of Bitcoin’s closest rival — Ethereum. Lastly, S&P Cryptocurrency MegaCap Index (SPCMC) will measure the performance of Bitcoin and Ethereum digital assets weighted by market cap. Later in 2021, the S&P Digital Market Indices series will include other coins and broader-based indices such as large cap and broad market benchmarks.
Intended to bring transparency to the emerging crypto market, S&P, in its FAQs for new indices, said that its cryptocurrency pricing and reference data is provided by Lukka – crypto software and data provider — via its Lukka Prime and Lukka Reference Data products. It uses the Lukka Prime Fair Market Value end-of-day price taken at 4:00 p.m. EST (1.30 a.m. IST) for cryptocurrency index calculation. The Lukka Prime Fair Market Value Pricing uses a proprietary methodology to determine the primary exchange of each digital asset at any given time, which in turn determines that asset’s fair market value, S&P said in its FAQ. Lukka serves institutions, including fund administrators and fund auditors that serve over 160 active crypto funds currently.
As the crypto frenzy among investors grows, latters’ demand for benchmarking and index-based solutions based on crypto and blockchain assets has also gained significance. “Traditional financial markets and digital assets are no longer mutually exclusive markets…As cryptocurrency becomes more mainstream, investors now have access to reliable and transparent benchmarks backed by institutional quality pricing data,” Peter Roffman, Global Head of Innovation and Strategy, S&P Dow Jones Indices said in a statement. S&P had launched customized cryptocurrency indexing solutions at the end of 2020.
As of May 3, 2021, SPBTC stood at 7,678.36, SPETH at 29,405.14 and SPCMC at 5,895.79. In May 2018, Bloomberg along with digital asset management company Galaxy Digital Capital Management had launched the Bloomberg Galaxy Crypto Index (BGCI) to track the performance of USD-traded cryptocurrencies such as Bitcoin, Ethereum, Monero, Ripple, etc. S&P’s launch of crypto indices comes amid the overall market cap of cryptocurrencies touching the $2.3-trillion milestone briefly on Monday, doubling from $1.15 trillion as of February 5, 2021. Growing institutional adoption for Bitcoin particularly has been among the key drivers for the crypto market to gain acceptance among businesses and countries.
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