S&P DJI-branded products will use data from New York-based virtual currency company Lukka on more than 550 of the top traded coins. S&P and Lukka hope more reliable pricing data will make it easier for investors to access the new asset class, and reduce some of the risks of the very volatile and speculative market. Digital assets such as cryptocurrencies becoming a rapidly emerging asset class, the time is right for independent, reliable and user-friendly benchmarks. The move by one of the world’s most well-known index providers could help cryptocurrencies become more mainstream investments. It comes as bitcoin has soared to record highs against the dollar, boosted by increased demand from investors who say the virtual currency is a hedge against inflation and a safe-haven asset.
Cryptocurrencies have been around for more than a decade, but have started attracting more interest from large financial companies over the last few years. Large firms including Fidelity Investments and Japan’s Nomura Holdings have starting safeguarding bitcoins and other cryptocurrencies for institutional investors, while major exchanges have started offering bitcoin derivatives. Emergence of more mainstream market infrastructure has made the asset class more accessible for institutional investors.