Ah, the stock market index provider FTSE Russell, in a moment of what one might call reckless ambition, has decided to broaden its indexing capabilities to embrace the digital assets and the elusive onchain data. A move, they claim, that reflects a burgeoning institutional interest in the wild, chaotic world of cryptocurrencies. One can only wonder if they have truly grasped the depths of this digital abyss.
In a rather grand announcement on the 28th of January, FTSE Russell has forged a partnership with the blockchain data provider SonarX, as if to say, “Let us create new indexes and data products, for the world is hungry for more!” 🍽️
Kristen Mierzwa, the head of digital assets at FTSE Russell, proclaimed with a flourish that by providing crypto-focused data, they aim to “better serve the needs of our institutional client base.” One can almost hear the collective sigh of relief from the institutional investors, who, after all, have been waiting with bated breath for such enlightenment. 😅
Specifically, FTSE Russell intends to wield onchain metrics and market data on various cryptocurrencies to construct fundamentally weighted indexes. These are not just any indexes, mind you, but those whose constituents are chosen based on fundamental factors. A noble endeavor, indeed, as traditional finance has long provided benchmarks for passively managed investment funds, which, let’s be honest, is a fancy way of saying “we’re just going to sit back and let the market do the work.”
In a moment of candor, a FTSE Russell spokesperson confided to CryptoMoon that “institutional investors are asking for more data and information [on cryptocurrencies] than in previous years.” It seems they are particularly keen on understanding the onchain data that could illuminate the intrinsic value of various protocols. Ah, the quest for intrinsic value! A noble pursuit, akin to searching for the Holy Grail in a sea of digital chaos.
Traditional financial circles, in their infinite wisdom, have been expanding their coverage of cryptocurrencies in recent years. Bloomberg Terminal, for instance, added over 50 digital assets back in 2022, as if to say, “Look, we’re hip too!” 🕶️
In 2023, FTSE Russell, in a moment of clarity, partnered with the digital asset manager Grayscale to offer an index series covering cryptocurrencies, smart contract platforms, and other segments of this bewildering industry. One can only hope they have packed their life jackets for this journey.
FTSE Russell, backed by the venerable London Stock Exchange Group, currently provides over 20 stock market indexes. The Russell Indexes allow investors to track various segments of the global stock market, with the Russell 2000 index of US small-cap stocks being the belle of the ball. 🎉
Institutional adoption on the rise
As for institutional adoption, 2024 was heralded as crypto’s biggest year yet. Much of this triumph can be attributed to the successful launch of several US spot Bitcoin (BTC) exchange-traded funds (ETFs), which have, astonishingly, attracted more than $120 billion in assets under management, according to Dune. One can only imagine the celebrations in the hallowed halls of finance! 🥳
The approval and launch of spot Ether (ETH) ETFs was a more muted affair in 2024, but analysts, ever the optimists, predict it’s merely a matter of time before institutions begin to allocate to the second cryptocurrency. The Ether ETFs saw more than $3 billion in cumulative inflows in the final two months of 2024, with Galaxy Digital forecasting that this trend will only intensify this year. It’s as if they are saying, “Hold on to your hats, folks!” 🎩
Meanwhile, Grayscale executive Dave LaValle has boldly predicted that the success of crypto ETFs will spawn new product offerings in the near future. “We’re going to see a number of more single asset products, and then also certainly some index-based and diversified products,” LaValle proclaimed last summer, as if he were a modern-day oracle. 🧙♂️
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2025-01-28 16:13