Bitcoin Indices Will be Listed on S&P Dow Jones in 2021
S&P Dow Jones Indices, a division of financial data provider S&P Global Inc., said Thursday that it would launch cryptocurrency indices in 2021. It is the latest major financial institution to enter the new asset class.
The companies claim that S&P DJI branded products use data from more than 550 traded currencies from the New York-based virtual currency company Lukka.
S&P and Lukka said in a joint statement that S&P clients could work with index providers to create custom indicators and other benchmarking tools about cryptocurrencies.
S&P and Lukka promised to provide more reliable pricing data to make it easier for investors to access a new asset class and reduce some highly volatile and attendance market risks.
“As digital assets such as cryptocurrencies become a fast-growing asset class, the time is right for independent, loyal and user-friendly benchmarks,” said Peter Roffman, Global Innovation and Strategy Head for S&P Dow Jones Indices.
The action of one of the world’s leading index providers will help cryptocurrencies become more mainstream investments.
Bitcoin will hit record highs against the dollar as increased demand from investors who say the virtual currency is a hedge and haven against inflation.
Currently, Bitcoin is trading at $19,300 in the latest trading, up 170% this year.
Cryptocurrencies have been around for over a decade. Still, over the past few years, they have subsequently begun to attract more interest from large financial institutions with their growing value.
Large companies, including Fidelity Investments and Nomura Holdings Inc. of Japan, have begun securing bitcoins and other cryptocurrencies for institutional investors. In contrast, significant exchanges have started offering bitcoin derivatives.
More mainstream market infrastructure has made the asset class more accessible to institutional investors, he said, adding that hedge fund managers such as Paul Tudor Jones and Stanley Druckenmiller have included bitcoin in their broader investment strategies.
