S&P Dow Jones Indices Unveils New Line of Cryptocurrency Indices

The S&P Dow Jones Indices, the index provider and unit of U.S. data firm S&P Global, has launched the new cryptocurrency index S&P Cryptocurrency Broad Digital Market (BDM), comprising 243 assets with a combined market capitalization of $1.2 trillion.

S&P DJI is proud to announce the launch of our latest cryptocurrency indices, featuring the new S&P Cryptocurrency Broad Digital Market (BDM) Index, wihch seek to provide transparency with a wide snapshot of the cryptocurrency market.
https://t.co/tu9cJ8A3mb pic.twitter.com/2TR4bJPpq0

— S&PDowJonesIndices (@SPDJIndices) July 13, 2021

According to a press release, the BDM covers about 80% of the cryptocurrency market’s total capitalization (around $1.3 trillion, according to CoinGecko). The index is based on data and methodology from New York-based Lukka. The parties have been collaborating since December 2020.

To be included in the BDM, an asset must meet the following criteria:

• at the time of inclusion in the index its market capitalization is $10 million or more;
• it has sufficient liquidity — its three-month median daily trading volume (MDVT) is at least $100,000;
• its developers published an official technical document.

The company decided to exclude stablecoins from the BDM, as they do not reflect market growth or contraction. Privacy-focused cryptocurrencies were also not included in the index.

The company reserved the right to remove assets that become the subject of regulatory or legal action.

In addition to BDM, the organization introduced four narrower indices:

• S&P Cryptocurrency BDM Ex-MegaCap Index — BDM excluding data on Bitcoin and Ethereum (S&P Cryptocurrency MegaCap Index);
• S&P Cryptocurrency LargeCap Index — BDM tracking the largest-cap cryptocurrencies by market capitalization;
• S&P Cryptocurrency BDM Ex-LargeCap Index — BDM excluding Cryptocurrency LargeCap;
• S&P Cryptocurrency LargeCap Ex-MegaCap Index — BDM tracking Cryptocurrency LargeCap data without including Cryptocurrency MegaCap constituents.

The company noted that the new suite of indices offers a broader view of the market, unlike the S&P Bitcoin Index and S&P Ethereum Index launched in May, which focus on the largest-cap assets.

In October 2019, Nasdaq introduced the CIX100 index based on 100 crypto assets.

In December 2020, the Chicago Board Options Exchange announced the launch of cryptocurrency indices, suitable for creating ETF.

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