Guru Gyan
Published in

Guru Gyan

For The Emerging Asset Class — Cryptocurrency

The world’s leading index provider is finally acknowledging the emerging tech-driven cryptocurrency assets and providing a platform for investors to easily access the new asset class.

Building capabilities

The S&P Dow Jones Indices (DJI) recently announced that it is launching global cryptocurrency asset index capabilities with New York-based virtual currency company Lukka in 2021. The S&P DJI-branded products will use Lukka’s crypto asset pricing data. S&P’s clients will be able to work with the index provider to create customized indices and other benchmarking tools on cryptocurrencies, the two companies said.

Why is S&P DJI launching this? As the market for cryptocurrency assets has evolved in recent years, investor interest in index-based solutions based on crypto and blockchain assets has grown which has reinforced the need for reliable pricing data.

S&P DJI believes that these new cryptocurrency index capabilities will make it easier for investors to access this emerging technology-driven asset class while potentially mitigating some of the common risks associated with this traditionally speculative market. The companies hope that more reliable pricing data will make it easier for investors to access the new asset class, and reduce some of the risks of the very volatile and speculative market.

New highs

Bitcoin has been surging to record highs led by investors demand as analysts believe pandemic has encouraged investors to reassess the long-term outlook for cryptocurrencies. However, Bitcoin is not the only cryptocurrency to have witnessed the surge. Other major cryptocurrencies like Ethereum, XRP, Litecoin, Cardano, Stellar and others have also been rallying sharply in the past few weeks.

Another news that helped the rally is PayPal’s announcement last month in which it said that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts. This opens up new horizons for the cryptocurrency payment market.

There have been many popular sources that provide detailed overview, price and chart metrics for tracking the performances of the cryptos. The concept of cryptocurrency index and exchange is also not new, many exchanges have also started offering bitcoin derivatives.

However, a leading index provider coming up with a platform may interest a wide range of investors and push cryptocurrencies to become more mainstream investments.

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