SINGAPORE - Hong Kong-based digital asset fund manager HashKey Capital and FTSE Russell, a business of the London Stock Exchange Group (LSEG), have launched three new cryptocurrency indexes.
The idea is to make it easier for traders to keep tabs on not just a single digital asset but a basket of assets that are aligned with more nuanced investment strategies.
The two entities announced on Jan 24 that they had jointly developed the indexes, which track digital assets by market capitalisation, infrastructure and application. The indexes can be accessed on the FTSE Russell website.
One of the three is the FTSE Custom Digital Asset Top 20 Index, which tracks the top 20 crypto assets based on their market cap.
Currently, this index reflects at least 90 per cent of the overall performance of the digital asset market, to give traders a diversified benchmark of digital asset performance, said HashKey Capital and FTSE Russell.
The FTSE Custom Digital Asset Infrastructure Index, meanwhile, tracks digital assets that make up the infrastructure layer of the crypto ecosystem.
These typically include smart contract platforms, protocol interoperability, and distributed computation and storage.
The third new index is the FTSE Custom Digital Asset Application Index, which tracks digital assets’ applications across the ecosystem, typically those linked to staking instruments and decentralised finance.
Staking refers to the process of locking up users’ digital tokens for a certain period to validate transactions on the blockchain, in order for them to get more tokens as a reward.
The two entities said there are plans to make the indexes available through data providers such as Bloomberg, FactSet, LSEG Data & Analytics, Morningstar and S&P Capital IQ.
Mr Chris Williamson, head of Asia-Pacific for Index Investments Group at FTSE Russell, said the indexes were developed after a rigorous vetting and monitoring process to meet institutional demand for investability and regulatory integrity in this new asset class.
He said FTSE Russell started market outreach on digital assets in 2018 before engaging American and British regulators in 2019, after which they developed a set of vetting criteria and methodology.
The methodology is meant to enable professional investors and market participants to benchmark digital tokens while mitigating risks specific to this asset class, added Mr Williamson.
FTSE Russell’s first single digital asset index was launched in 2021, while the FTSE Global Digital Asset Index Series, which filters out questionable platforms, assets and trade information, was launched in 2022.
Mr Deng Chao, managing director of HashKey Capital, said the launch caters to the evolving needs of clients as there has been “a significant surge in demand from investors who want to diversify their portfolios beyond the established cryptocurrencies”.
Globally, several crypto platforms have created their own crypto indexes and many traditional index providers have also entered this space in recent years. These include Bloomberg, S&P, MSCI and crypto exchange Coinbase.
Hashkey’s Singapore arm said in December 2023 that it had received a full capital markets services licence from the Monetary Authority of Singapore.
Founded in 2015, HashKey Capital is one of the largest crypto asset managers and the earliest institutional investor in Ethereum.
It has managed over US$1 billion (S$1.3 billion) in client assets since its inception, with investments in over 500 projects in infrastructure, tools and applications.
