By
Bena Ilyas
April 25th, 2024
FTSE says its crypto index will be on the same rung as its FTSE 100 and Russell 2000, and will feature 43 different crypto assets.
According to reports, FTSE Russell, a London Stock Exchange Group subsidiary, plans to develop a crypto index comprising 43 digital assets. According to FTSE Russell head of ETF strategy and business development, Kristien Mierzwa, the index will be alongside the FTSE 100 and Russell 2000. In her own words:
“The end goal is to have EU and UK compliant indices which sit right alongside the FTSE 100 and the Russell 2000.”
Mierzwa also touched on the company’s plan to expand the suite of data in the digital asset index series. Currently, FTSE only provides data on Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA). She further stated that there were 43 assets currently going through the vetting process – and hinted at more projects added to the FTSE’s digital asset index next year.
Mierzwa stated that the FTSE deemed this move absolutely necessary since crypto popularity is increasing. She pointed out that increased popularity and mainstream outlook ensure that there is an even more pressing need for reliable and thorough pricing. As Mierzwa put it, “This was clearly becoming a market that people wanted data around.”
The planned indices would comply with the UK and the US, and its screening process would only take into account regularly-traded tokens. However, Mierzwa confirmed that stablecoins, as well as meme coins like Dogecoin, could be included, along with blended products. These products essentially pare down risk by pairing crypto with less volatile assets such as gold.
FTSE Crypto Index Will Leverage Steadily Growing, but Still Largely Unregulated Crypto Space
According to FTSE Russell, in 2025 crypto will have a global market cap that exceeds $3 trillion. This will bring that asset class up to par with private equity.
The development represents a much-needed stamp of approval for crypto market opportunities in the UK’s mainstream financial sector. This is because the Bank of England had called for urgent oversight of digital assets as recently as October. The governor of the governing financial institution Andrew Bailey cautioned that the market risked global economic stability without adequate regulation. Bailey specifically mentioned the sheer size of the digital assets market as the prime reason for this.
Additionally, last month, the Advertising Standards Authority criticized the practice of advertising digital assets to investors devoid of appropriate warnings. Furthermore, the FCA also issued similar warnings after popular American celebrity Kim Kardashian seemingly endorsed a crypto product on Instagram. The agency stated that celebrities should not publicize crypto market products without extensive due diligence. The FCA also warned of the risks of “speculative” crypto tokens. Specifically, it mentioned that some influencers and celebrities even promoted tokens that turned out to not exist.
The benchmark index of the UK stock market came into existence in the ‘80’s. To date, it is the main reference point for the performance of the UK stock market.