Grayscale Investments and FTSE Russell have teamed up to launch five new cryptocurrency indexes aimed at helping investors track and monitor the performance of various sectors in the crypto ecosystem.
Bitcoin and ether, the two largest cryptocurrencies by market cap, have received the lion’s share of attention from investors, but Grayscale CEO Michael Sonnenshein thinks the new Crypto Sector Indices will help illuminate other cryptocurrencies for both retail and institutional investors.
“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.
