“We felt that there was going to be, coming out of this crypto winter, a recognition that there was an entire asset class here, that no longer can investors afford to solely focus on bitcoin, or solely focus on ethereum … but that it was really important that investors realize that they were part of a broader asset class,” Sonnenshein said at a media dinner on Oct. 23. “What we felt was missing in the market was a way for investors to approach those other crypto assets because for a lot of folks it can be daunting.”
The new indexes separate over 150 cryptocurrencies into five sectors: the currencies sector, which includes cryptocurrencies that serve as either a medium of exchange, a store of value, or a unit of account); the smart contract sector, which includes the native cryptocurrencies of baseline platforms for self-executing contracts; the financials sector — focused on cryptocurrencies in financial transactions and services; the consumer and culture sector, which includes cryptocurrencies that support “consumption-centric activities;” and the utilities and services sector, with cryptocurrencies with enterprise-level applications.
Sonnenshein said that Grayscale Investments reached out to FTSE Russell to explore a partnership approximately a year ago, and both institutions found it to be a natural fit.
The London-based index provider’s new partnership with Grayscale is not its first foray into the crypto space; in 2021, FTSE Russell launched three crypto indexes tracking the prices of bitcoin, ether and cardano, as well as a broad crypto index tracking the price of 43 digital assets.
Like FTSE Russell’s existing crypto indexes, data for the new ones will be provided by Digital Asset Research, a New York-based crypto data firm.
The news comes less than a week after Grayscale’s parent company, Digital Currency Group, was named in a civil lawsuit by the New York attorney general’s office accusing it, Grayscale’s sister company Genesis and rival exchange Gemini of fraud for allegedly concealing $1.1 billion in losses from their customers.
When asked whether the lawsuit would impact Grayscale’s partnership with FTSE Russell or other business. Sonnenshein said simply: “It doesn’t,” and added that Grayscale was not named or otherwise implicated in the suit.
Grayscale is the largest cryptocurrency-focused asset manager overseeing approximately $20 billion in assets under management.