In today’s crypto news, a new index product tracking cryptocurrencies has been launched by Grayscale in partnership with FTSE Russell, a subsidiary of the London Stock Exchange.
Summary
Crypto News: Grayscale and new indices track cryptocurrencies by use case
Called the Crypto Sector Index Series, it is the new crypto index product launched by Grayscale in partnership with FTSE Russel, a subsidiary of the London Stock Exchange.
The crypto-asset management company decided to start this new venture into the crypto index business, through this product, which tracks the price of different groups of digital assets, based on their use cases.
Here is how FTSE Russell describes the new product:
“The FTSE Grayscale Crypto Sector Index Series offers you a new way of thinking about the digital asset market, providing a comprehensive framework that allows you to measure the performance of the expanding crypto universe.
The index series seeks to bring clarity to this rapidly evolving asset class by identifying five distinct sectors that can be used as a roadmap to navigate the digital asset universe.”
In practice, the five groups in the Crypto Sector Index Series are:
- Cryptos that act as a medium of exchange or store of value (such as bitcoin, litecoin);
- Platforms based on smart contracts (such as Ether, Solana, Polygon);
- tokens representing financial services (such as uniswap, compound, curve);
- tokens representing artistic or gaming web3 goods (such as NFT)
- tokens representing real life projects (such as chainlink, filecoin)
Finally, to weight the assets within each bucket, the indices will use the square root of the market capitalisation of each cryptocurrency.
In this way, the most highly capitalised cryptocurrencies, such as BTC, will not be overweighted across the group and investors will be able to get a more diversified exposure.
Greyscale: New crypto index product and good news for bitcoin ETFs
Coinciding with the launch of its new crypto index product, Grayscale also appears to have finally formalised its victory over the SEC in the case concerning its request to convert GBTC into a spot bitcoin ETF.
Grayscale is the company that created and manages the world’s largest bitcoin fund, the Grayscale Bitcoin Trust (GBTC), which holds more than 621,000 BTC. The GBTC is also larger than MicroStrategy, which holds 158,000 BTC.
The GBTC is a collateralised fund that replicates the price movement of the underlying asset, but is only listed OTC and not on traditional exchanges.
As a result, Grayscale applied to the US SEC for permission to convert its GBTC into a full-fledged spot bitcoin ETF. However, the regulator denied the request and Grayscale filed a lawsuit against the SEC.
The latest news is that the Court of Appeals ruled that the SEC did not have sufficient grounds to block the application and therefore denied it. It now remains to be seen how the SEC will proceed.
Bitcoin price prediction without talking numbers
Earlier this month, Grayscale published his prediction on the price of bitcoin (BTC), but without talking numbers.
His speech is based on the idea of what a rise in the price of the queen of cryptos could bring, given that it is still very small in terms of market value compared to the world’s superficial reserves, such as gold.
In practice, Grayscale suggests that there is plenty of room for bitcoin to grow if it is able to partially take gold’s place in the financial markets.
Speaking of bitcoin price predictions, global investment bank Morgan Stanley has also recently weighed in. Again, without talking numbers, it seems that according to analyst Denny Galindo, crypto winter may be over, while crypto spring is probably on the horizon.
