By Lucas Williams
S&P Dow Jones Indices LLC, a joint venture between S&P Global and News Corp deals with the licensing process. S&P Dow Jones entered in Crypto market earlier this year in May. Since its arrival, the company has seemed sluggish and has not participated in the development process hyperactively. On Tuesday, the officials announced that the company is going to launch five new cryptocurrency index products. One index includes 240 coins. It is the first time company has hinted about expanding its digital assets market volume benchmark.
A press release said that the company’s “broad digital market” index includes 240 coins per index. The range in the coins index will open up multiple options for traders to dive in. S&P’s website said the “index formed to carry out the detailed research about the widely spread investment universe.”
However, Luka, S&P’s digital partner in cryptocurrency data, did not show any response to CoinDesk. As far as market capitalization is concerned, HXRO is the 240th-largest company. It is not sure that S&P’s cryptocurrency coins will consider the market size or not.
As S&P decided to go live alongside Bitcoin and Ether. The company talks about the efforts made by Wall Street to turn the crypto market into a more digestible and suitable marketplace. S&P’s vision for these newly launched indexes is to use points, rather than relying on prices shown in the market.
Ray McConville in his conversation with CoinDesk, described that point-based methodology covers asset growth in a better way, as compared to price-oriented growth. In Crypto, market prices are highly variable. Hence a price-oriented approach to measure the performance and growth of newly launched indexes are not what the company’s philosophy is. S&P Dow Jones’ methodology document for the year 2021 reveals the mathematical paradigm for the calculation of index points. The list of the company’s new indexes includes Broad Digital Market, Crypto LargeCap, BDM Ex-MegaCap, BDM Ex-LargeCap (BDM without the Large Caps), and Crypto LargeCap Ex-MegaCap.
S&P Dow Jones head of the digital innovation department, Peter Roffman, in his press statement said that company is working on the launch of its other crypto indices. For the future S&P, Dow Jones is looking to further expand its digital indices range this will help in bringing more transparency to this emerging and exciting market. S&P’s latest development has been welcomed by some of the biggest industry exchanges and crypto analysts. There is hope that the launch of these new indexes will play a key role in bringing more transparency and customer trust when it comes to the crypto market. The lack of transparency is the biggest hurdle between investors and crypto trading.
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