S&P Dow Jones Indices, a prime financial data provider, confirmed that it will debut cryptocurrency indexing service in collaboration with crypto tax service Lukka in 2021. The indexes will cover a reported 550 cryptocurrencies as announced on Thursday.
The upcoming product will become a hub for cryptocurrency pricing data when more Wall Street investors than ever are searching. Bitcoin’s bull run this year is said to be driven by institutions angling to the crypto. S&P DJI describes Bitcoin (BTC) and altcoins as an emerging asset class during the press conference on Thursday. Peter Roffman, head of innovation and strategy at S&P DJI, added that it was the right time for independent, reliable, and user-friendly benchmarking tools.
Revitalizing the Crypto-asset Ecosystem
The new development by popular index providers could help cryptocurrencies become more mainstream investments. S&P and Lukka anticipate more reliable pricing data that will simplify access to the new asset class by investors, further minimizing risks of the very volatile and speculative market. The two companies did not mention the specific cryptocurrencies included or the criteria of their selection.
Robert Materazzi, CEO of Lukka, said that the partnership with S&P DJI is a milestone that stimulates the crypto-asset ecosystem and traditional financial services. The Lukka CEO further noted that in a swift industry that is developing, it is significant to ground institutional standards when working with reputable brands, such as S&P DJI. Lukka is delighted to help drive ongoing innovation collaboration with S&P DJI.
Cryptocurrencies on High Demand
Cryptocurrencies have existed for over a decade now; many companies were unsure about them but have started attracting more interest from large financial companies over the last few years. Bitcoin has particularly been making headlines recently. It recently broke a new all-time high value on November 30, 2020, and accompanies a wave of mainstream financial giants—including PayPal, MicroStrategy, and Square—all getting tangled in the crypto world.
Popular companies like Japan’s Nomura Holdings Inc and Fidelity Investments have begun safeguarding cryptocurrencies for institutional investors, while prime exchanges have started offering bitcoin derivatives.
The surfacing of more mainstream market infrastructure has made the asset class more accessible for institutional investors, with hedge fund managers like Paul Tudor Jones and Stanley Druckenmiller saying they incorporate bitcoin in their broad investment strategies.
Ripple CEO Brad Garlinghouse recently stated that there was never a dull moment in crypto. Investor’s interest is skyrocketing. The industry growth advances to the real-world utility.