- Indices help to compare the current market prices to previous levels and calculate market performance. Till now, there has been no popular index for crypto. But now, S&P Jones has launched 3 crypto indices based on Bitcoin and Ethereum. It will cover about 550 digital currencies and assets and will help bring a level of transparency to the market. These new indices will compete against Bloomberg’s indices that measure cryptocurrencies’ performance trading in USD.
More about the crypto indices
Indexes are very important for a market as new as crypto. It will help people understand the kind of returns the market is giving and why people are so inclined to invest. These indexes are similar to BSE and NSE that measure the performance of stocks in Indian exchanges. S&P Dow Jones are widely respected for their indexes and how they measure market performance. This is why the company entering the market is quite a big step for the industry.
The indices in Bitcoin and Ethereum are called the SPBTC and SPETH, respectively. And they will track the performance of these two coins, respectively. On the other hand, we will also have Mega cap indices that will track the cryptocurrencies based on market cap. These three indices seem to be quite adequate for tracking the crypto market. The data for the indices will be provided by US blockchain company Lucca backed by the parent company of S&P Dow Jones.
The prices of every day will be taken at 4 PM EST as the market closing time. This is because crypto markets are open 24/7. Lucca will use it as a primary algorithm to calculate the fair market value of the asset at any given time. The data will be great for investors who like to do their in-depth research and diligence before investing in cryptocurrencies.
What will be the benefit of the indices?
Crypto markets are still new, and people still think that they are not safe. So, seeing big names and traditional tools in the market will actually mean that these people change their views on the same. We have already seen a huge surge in the number of people investing in crypto in recent times. And this number is only expected to increase from here on if such big companies start to participate in the sector.
Even the CEO of WazirX addressed the same and said that S&P had been widely recognized to track the traditional markets. And them entering the crypto space will give a lot of exposure to the industry. This could lead to even greater participation in the space, and more institutions can invest in crypto assets.
What are your thoughts on S&P Down Jones releasing crypto indices to track market performance of BTC and ETH? And will it be helpful for this new market? Let us know in the comments below. Also, if you found content informative do like and share it with your friends.