Bringing Digital Assets into the Limelight
FTSE Russell, the esteemed bastion of stock indexes known for the iconic FTSE100, has ushered in a new era by launching a series of digital asset indexes. Partnering with Digital Asset Research, this innovative move aims to shine a bright light on the often opaque world of cryptocurrencies as of November 29, 2022.
A Historical Context: The Rise of Crypto Indexes
Historically, indexes have been the trusty sidekicks of investors, tracking various sectors of the stock market with style and precision. However, the landscape for cryptocurrency indexes had been pretty barren prior to 2021. Fast forward to today, and we see FTSE Russell joining the fray, stepping into a realm where American and German companies have long taken the lead with their own crypto indexes.
What’s in the Index Series?
The newly minted FTSE Digital Asset Index series comprises a total of eight indexes, catering to digital coins of varying market capitalizations. Here’s a sneak peek into what they’ve crafted:
- Large Cap Index
- Mid Cap Index
- Small Cap Index
- Micro Cap Index
- Multi Cap Combinations
This impressive lineup is tailored to accommodate the plethora of digital assets flooding the market. However, as of yet, the company has kept the specific constituents of each index under wraps, opting instead to release performance data for Q1 to Q3 2022.
Words of Wisdom from the Top
Arne Staal, the CEO of FTSE Russell, shared insights during the announcement. He emphasized that their approach is not just another fad in the investment world. Staal remarked,
“FTSE Russell has taken a measured approach to this frontier investment space and has built a rigorous and transparent framework…”
This assertion resonates as the cryptocurrency sector is notorious for its volatility and flux.
Criteria for Inclusion: The Heavy Lifting Behind the Scenes
One of the critical aspects of these indexes is the stringent selection criteria imposed by FTSE Russell. The organization relies on a standardized set of 21 criteria to vet institutions that provide pricing data. Once they pinpoint trustworthy sources, the coins that make the cut for each index are determined based on this robust data foundation.
So, while the digital asset realm has been a wild west, FTSE Russell is stepping up with a structured roadmap that could lead to improved transparency and reliability in the crypto market.
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