FTSE Russell plans to develop a new crypto index

In October, a digital asset index was launched that provides data on BTC, ETH and ADA

 FTSE Russell logo                                 
FTSE Russell is working on a new crypto index – Photo:Alamy
                                

FTSE Russell – the subsidiary of London Stock Exchange Group (LSEG) which produces and maintains stock market indices such as the FTSE 100, the FTSE All-Share and the Russell 2000 – is planning on developing a new crypto index.

Kristen Mierzwa, FTSE Russell’s head of exchange-traded fund (ETF) strategy and business development, told City A.M. that this index would “sit alongside” other benchmark equities.  

The crypto index will contain 43 digital assets, with Mierzwa adding that stablecoins and meme coins could be added to the index, meaning such cryptos as tether (USDT) and dogecoin (DOGE) could make an appearance within the index.

The head of ETF strategy also said that the digital asset index will undergo a rigorous vetting process, and that FTSE Russell aims to screen the numerous cryptos which are added to the index.

Interest in crypto is growing

FTSE Russell said: “Institutional interest in digital assets is growing”. It said it therefore needs to “deliver quality crypto data” to meet clients’ needs, stating that the digital asset market has historically lacked trustworthy pricing data. The new index is intended help to counter this problem.

Mierzwa added that “the end goal is to have European Union (EU) and UK compliant indices which sit right alongside the FTSE 100 and the Russell 2000.”

Expansion of the current digital asset index

FTSE Russell already launched a digital asset index in October, but at the moment it only provides data on three cryptos: bitcoin (BTC), ethereum (ETH) and cardano (ADA).

Mierzwa stated that in 2022, numerous digital assets will be added to the index and said: “This was clearly becoming a market that people wanted data around”.

FTSE Russell predicts that cryptos will have a global market capitalisation greater than $3trn by 2025, putting the asset class on the same level as private equity.

However, not every financial organisation is a supporter of cryptos. In October,  Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England (BoE), warned that the regulation of cryptos needs to be seen as a “matter of urgency,” as a market crash is “plausible”.

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