S&P Dow Jones Indices To Launch Cryptocurrency Indexes In 2021

S&P Dow Jones Indices (S&P DJI) is set to launch a cryptocurrency index in partnership with New York-based digital asset firm Lukka by 2021. This makes it the latest major financial firm to foray into the cryptocurrency industry.

According to the press release made today, S&P DJI will use data from Lukka to create indices for over 500 crypto-assets. This data will include Lukka’s aggregated data services Lukka Reference Data and Lukka Prime. Thus S&P DJI clients will work with the index provider to create customized indices and benchmarks for crypto-assets.

S&P DJI believes that integrating reliable pricing data would attract investors and reduce the risk of a volatile and speculative market. It is also expected that more firms will utilize the pricing data to offer new markets on their platforms.

S&P DJI chief Peter Roffman commented on the development, insisting that cryptocurrencies were fast emerging as a critical asset.

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“With digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable, and user-friendly benchmarks,”  He said.

Financial Institutions Turning To Crypto Assets

S&P Dow Jones Indices is arguably the most popular index provider. It provides indexes for S&P 500 and Dow Jones Industrial Average, two indices renowned in financial markets globally. S%P DJI foray into crypto-assets is a huge one because it will open a wave of investors towards crypto-assets.

There has been a huge rush by traditional financial firms towards crypto-assets in 2020. The rise of Bitcoin has contributed largely to this as the leading asset has enjoyed a massive bullish run. This has also led to an increase in demand from investors who view the currency as a hedge against inflation.

Large firms like Fidelity Investments and Grayscale Investment have started holding crypto-assets for institutional investors. At the same time, traditional exchanges have started offering Bitcoin derivatives.

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This latest news has been received with positivity from the crypto community. With 2021 on the horizon, expectations are high that cryptocurrencies could move mainstream in the coming weeks.