S&P Dow Jones Indices, a division of S&P Global Inc, will launch cryptocurrency indices during 2021.
This was revealed by Reuters, which reports that the financial data provider will use data from crypto company Lukka on over 550 of the most traded cryptocurrencies.
In addition, custom indices and other cryptocurrency benchmarking tools may also be created.
The aim is to provide more reliable price data in order to make it somewhat easier for investors to access this new asset class, partly reducing the risks of their highly volatile and speculative market.
The Dow Jones cryptocurrency index
Global Head of Innovation and Strategy at S&P Dow Jones Indices, Peter Roffman, said:
“With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks”.
Indeed, in 2020, not only have traditional financial players, or those representing institutional finance, entered this market, but so have many new investors, large and small, for whom the crypto market is still very different from traditional ones such as forex or equities.
This gap, however, is destined to close, perhaps as early as next year, and the decision of the S&P Dow Jones is headed in this direction.
As cryptocurrencies become established in the traditional financial markets, it is possible that all players in the sector will have to deal with them sooner or later.
Initially, it will be voluntary initiatives, i.e. by operators who decide to try and exploit this new asset class to do business, but over time even critics or detractors may have to face it.
At the end of this process, cryptocurrencies will probably be present on the financial markets just like more traditional assets, such as fiat currencies themselves, to the point of becoming the norm for financial operators, and not the exception.