On July 13, S&P Dow Jones Indices (S&P DJI) announced the launch of the new S&P Cryptocurrency Broad Digital Market (BDM) Index. BDM represents a snapshot of the performance of the cryptocurrency market, covering more than 240 cryptocurrencies. As early as December last year, S&P Dow Jones announced that it was seeking to cooperate with crypto asset software and data companies to plan to launch a global cryptocurrency asset index function. At the end of last year, when the “bull momentum was beginning to show”, traditional institutions such as Square and PayPal entered the market in large strides, and Grayscale’s Bitcoin Trust Fund (GBTC) has become increasingly compliant and growing. The industry generally believes that the launch of the S&P encryption index will trigger a new wave. Now it is finally here.
According to the official website, the S&P Cryptocurrency BDM Index is not a single index, but a series of collections consisting of the following indexes:
· S&P BTC Index-a measure of Bitcoin’s performance.
· Standard ETH Index-measures the performance of Ethereum.
· S&P Cryptocurrency LargeCap Index-used to measure the performance of the largest “constituent stocks” (ie mainstream currencies) by market capitalization.
· S&P Cryptocurrency Ex-LargeCap Index-does not include the components of the LargeCap Index.
· S&P Cryptocurrency MegaCap Index-measures the performance of Bitcoin and Ethereum digital assets.
· S&P Cryptocurrency Ex-MegaCap Index-does not include the components of the MegaCap Index (Bitcoin and Ethereum).
· S&P cryptocurrency LargeCap Ex-MegaCap-measures the performance of the constituent stocks of the LargeCap index, excluding the constituent stocks of the MegaCap index.
According to its data source, the cryptocurrency pricing and reference data of the S&P BDM index are provided through Lukka Prime and Lukka. Lukka is a leading institutional crypto asset software and data service provider. It has been operating since 2014, covering the most liquid crypto assets, including the cryptocurrencies with the largest trading volume, such as Bitcoin, Ethereum, Ripple, USDT and Litecoin. Prices come from more than 10 sources, including the largest, most trusted, and most liquid cryptocurrency exchanges. Lukka currently serves more than 160 active crypto funds.
The S&P BDM Index is obviously not the first player to launch an index for the crypto market. According to Chain Hill Capital’s research, there are at least 80 indexes for crypto assets in the industry.
Bloomberg has made an attempt to launch the encryption index BGCI in 2018. Another widely cited index in the early years was the Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX) created by the New Zealand Blockchain Data Research Company (Brave New Coin) for Bitcoin and Ethereum. They belong to Their era can be traced back to 2010, and in February 2019, BLX and ELX announced the launch of the Nasdaq official website. In March of the same year, the CoinMarketCap (CMC) index launched two cryptocurrency benchmark indexes on the terminals of Nasdaq, Bloomberg Business, Thomson Reuters Eikon (Refinitiv) and Börse Stuttgart. They are provided by Solactive AG, an independent index service provider in Germany. It has gradually developed into one of the most popular portals for investors to view the price of cryptocurrencies.
Although it was late, the launch of the S&P Cryptocurrency BDM Index still has positive significance. Because since Charles Dow invented the first index in 1884, S&P Indices has been innovating and developing indexes for various asset classes. Gathering the world’s largest data and research resources, the S&P index means the location of the iconic indicators of the financial market.
The entry of traditional indexes and index funds will become an important infrastructure for financial institution funds to enter the crypto world, and will help promote crypto compliance. Regardless of whether traditional financial practitioners are willing to invest in crypto, at least they can now understand the trend of the crypto market through the S&P Dow Jones website.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/sp-dow-jones-launched-the-bdm-encryption-index-what-does-it-mean-to-the-industry/
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