FTSE Russell has made its debut foray – in a formal capacity – into crypto-asset markets with the unveiling of the FTSE Digital Asset Index Series.
Kristen Mierzwa, Managing Director, ETP Strategy and Business Development at FTSE Russell.
The series has launched with three indices – the FTSE Bitcoin Index, the FTSE Ethereum Index, and the FTSE Cardano Index. Bitcoin, ethereum, and cardano are currently the largest, second-largest, and fifth-largest cryptocurrencies by total market cap.
The indices are the index provider’s first FTSE-branded cryptocurrency benchmarks available to market participants.
According to FTSE Russell, they have been developed to accurately capture the performance of their underlying digital asset, allowing for more seamless integration into traditional portfolio analysis and processes.
The venture is supported by Digital Asset Research, a New York-based provider of cryptocurrency pricing and market data to institutional investors.
FTSE Russell began its collaboration with Digital Asset Research in March 2019 with the development of an indicative multi-crypto index that was effectively used to test and evaluate benchmarks for the digital assets market.
The project led the firms to develop the FTSE DAR Reference Price, a robust pricing methodology that captures data from vetted exchanges and meets the requirements for regulated EU and UK benchmarks.
At a minimum, eligible cryptocurrency exchanges must be centralized spot exchanges, allow for natural and unhindered trading, report a minimum of $5 million in trading each day, be unrestricted to international participants, and have an identifiable leadership team.
The exchanges are also continuously monitored for regulatory, technical, and governance factors with offending exchanges immediately losing their eligibility.
Due to the indices meeting the EU and UK benchmark requirements, they may be used as official performance benchmarks or as the basis for index-linked products including ETPs.
Kristen Mierzwa, Managing Director, ETP Strategy and Business Development at FTSE Russell, said: “FTSE Russell’s new digital asset indices will provide customers with a comprehensive, high quality, data source for their investment analysis and product development needs. Working alongside Digital Asset Research, this launch reflects our combined expertise in digital asset data and index development, as well as our rigorous approach to compliance, governance, markets and performance measurement.”
Doug Schwenk, Chairman of Digital Asset Research, added: “We are pleased to be working with FTSE Russell on developing their portfolio of digital asset indices. Digital Asset Research provides institutional-quality research and market data for crypto and FTSE Russell applies our experience in this domain to construct quality benchmarks.”