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S&P launches Bitcoin and Ethereum cryptocurrency indexes

S&P launches Bitcoin and Ethereum cryptocurrency indexes

S&P Dow Jones Indices, a leading global source for index-based data and research, has introduced its first cryptocurrency indices amid a major uptick in crypto markets.

The company announced Monday that it has launched three crypto indices linked to the performance of the two largest cryptocurrencies: Bitcoin (BTC) and Ethereum (ETH).

The newly introduced indices include the Bitcoin-based S&P Bitcoin Index (SPBTC), the Ether-based S&P Ethereum Index (SPETH), and the S&P Cryptocurrency MegaCap Index (SPCMC), which is designed to track the performance of BTC and ETH, weighted by market capitalization. All three indices are available immediately on the S&P DJI website.

S&P's crypto indices are meant to further normalize Bitcoin and Ethereum data among Wall Street traders hungry to decipher crypto price action. The product suite takes on Bloomberg and Galaxy's existing indexes.

The company emphasized that the new crypto indices are designed to measure the performance of crypto assets listed on recognized, open exchanges that meet minimum liquidity and market capitalization requirements. "The indices are designed to bring transparency to the emerging cryptocurrency market," S&P DJI noted.

According to the announcement, the S&P crypto price and reference data are provided by crypto accounting and data company Lukka. The company is backed by S&P DJI's parent company S&P Global, as well as billionaire investor George Soros and accounting consultant

In doing so, Lukka uses the "Fair Market Value Pricing" methodology to reflect the price of an asset in points, not dollars. The methodology yielded the following point valuations Monday afternoon: 7,611 for BTC, 24,811 for ETH and 5,617 for MegaCap.

Each index measures price appreciation, not the actual price, said S&P spokesman Ray McConville. "So if we compare the two indices, we can see that Bitcoin has grown YTD (Year-To-Date) 95.67% in value versus ETH, which has grown 273.72% in value YTD," he said via email. "The actual index value is not so much important, but more the change in that index value over time."

S&P DJI initially announced its plan to launch cryptocurrency indices in late 2021, reportedly aimed at covering up to 550 digital assets.

S&P DJI's latest move into the crypto market marks an important milestone for cryptocurrency adoption by traditional finance. The move comes amid a renewed rally in crypto markets, with Ethereum - the second-largest crypto by market capitalization - reaching a new all-time high above $3,400 on Monday.