Cryptocurrencies such as Bitcoin, Ethereum and Co are increasingly entering the mainstream. But in addition to the heavyweights of the cryptoverse, there are now several thousand other crypto tokens, which makes an overview very difficult. The index provider STOXX has taken this as an opportunity to provide more clarity with its own crypto index.
• STOXX offers its own crypto index
• Cooperation with Valor Inc. and Bitcoin Suisse
• Market capitalization, developer activity and others important for inclusion
The index provider STOXX has launched a blue-chip index for cryptocurrencies. The new crypto stock market barometer was created in collaboration with the Zug-based crypto company Bitcoin Suisse and the DeFi expert Valor Inc., according to a press release from STOXX.
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It is the first step of the Deutsche Börse subsidiary into the still young cryptoverse. The STOXX Digital Asset Blue Chip Index tracks a basket of different assets that best reflect the crypto sector. The selected tokens were selected based on the global Crypto Taxonomy (GTC) from Bitcoin Suisse. This is a multi-stage process through which the strongest and most representative assets in the crypto sector are identified. The market capitalization of the assets is also taken into account, but only up to an upper limit of 30 percent, which is intended to limit the cluster risk caused by “dominant” cryptocurrencies such as Bitcoin and Ethereum. However, more important than the asset value is “the number of developers and the economic activity in the associated system,” as Bitcoin Suisse President Luzius Meisser tells the NZZ.
Ten cryptocurrencies in the index
Ultimately, the index includes ten cryptocurrencies. In addition to Bitcoin and Ethereum, the stock market barometer also lists Ripple, Cardano, Avalanche, Tron, Chainlink, Polygon, Cosmos and Aave. The selection is particularly about finding those crypto projects that have already proven themselves in the past and are likely to survive in the long term. That’s why meme coins like Dogecoin or SHIBA INU are left out, even though they are among the largest cryptocurrencies based purely on market capitalization. Stablecoins are also avoided in the index, as they only reflect the value movements of traditional currencies such as US dollars or euros.
Portfolio allocations are changing
STOXX manager Axel Lomholt comments on the new index offering in the STOXX announcement as follows: “Investors are clearly increasingly investing in alternative asset classes in order to diversify their portfolios. For this reason, we are moving into an investment segment that is gaining a foothold in more and more portfolios . With Bitcoin Suisse, we have an established partner at our side and rely on an index methodology that responds to investors’ need for resilience.” Lomholt also explained to the Neue Zürcher Zeitung that the asset allocation strategy in investors’ portfolios has generally shifted in recent years. While just a few years ago a classic split of 60 percent into stocks and 40 percent into bonds was the norm, institutional investors are now channeling 20 percent into alternative asset classes, which also includes the crypto sector.
STOXX has not only created an index for cryptocurrencies, but also linked it to its own exchange-traded product (ETP), which can be traded via XETRA and is licensed by Valour. Annual fees of 1.9 percent are due for the index ETP.
More attractive for institutional investors?
However, such crypto ETPs are not new products per se. Even before the recent launch by the Deutsche Börse subsidiary, there were other providers such as Sygnum or 21Shares that offer a very similar offering. However, with STOXX, the crypto sector could now also become more attractive for institutional investors such as pension funds or insurance companies, as the index provider has a high level of trust, as the Neue Zürcher Zeitung argues.
“Of course, there are already indices for crypto assets today, but their providers are largely unknown in the traditional financial world. That’s why it is an important signal that three leading companies are now launching the digital asset blue chip index together make it investable,” argues Marco Infuso from Valor Europa to the news portal.
Editorial team finanzen.net
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