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Cryptocurrencies

CoinMarketCap launches cryptocurrency indices on NASDAQ, Bloomberg

Data provider CoinMarketCap is launching a pair of cryptocurrency benchmark indices on NASDAQ, Bloomberg, and several other market information services, it announced Wednesday in a blog post.

Both indices will focus on the market capitalization of the 200 largest cryptocurrencies, with one index excluding Bitcoin, which at more than $71.5 billion currently accounts for about half of the total.

The two CoinMarketCap indices are the CMC Crypto 200 Index (CMC200), which includes Bitcoin, and the CMC Crypto 200 ex BTC Index (CMC200EX), which excludes it. They launched today on the NASDAQ GIDS, Bloomberg terminals, Thomson Reuters Eikon (Refinitiv), and Börse Stuttgart.

The CoinMarketCap indices will be calculated and administered by Solactive AG, the German index provider behind the soon-to-be-defunct CBOE Bitcoin Futures index. The indices will be rebalanced the last day of each calendar quarter, according to the blog post by CoinMarketCap Global Head of Marketing Carylyne Chan. The weight given to each cryptocurrency will be fixed on the selection date, which is five days before the quarterly rebalance.

CoinMarketCap’s market capitalization focuses on the price of the circulating supply of a particular cryptocurrency, excluding supplies of tokens that are locked, reserved or otherwise unavailable for sale, the company said.CoinMarketCap aggregates the prices various cryptocurrencies are selling for on a wide variety of exchanges and provides a standardized price quote.

“We are excited to launch and share these indices with the market,” said Brandon Chez, CEO of CoinMarketCap. “These indices will promote greater accessibility to cryptocurrency data in an easier-to-digest format. In partnership with Solactive, our chosen index administrator, we hope these professionally-calculated indices will serve to expand the reach of cryptocurrencies into the larger financial markets.”

One of the main business purposes of creating an index, such as the Dow Jones Industrial Average or S&P 500, is to license it as a way for mutual funds and exchange traded funds (ETF) to allow investors to track the value of an asset class by investing in a basket of the assets in that index. A number of exchanges, among them the Winklevoss twins’ BATS BZX Exchange, have been vigorously lobbying the U.S. Securities and Exchange Commission (SEC) to approve a cryptocurrency ETF, so far without success due largely to concerns about potential market manipulation.

Developing custom indices for clients is one of the goals of the new index products, Solactive head of sales Fabian Colin said in the announcement.

“Conversations have already started,” he said. “We are looking forward to developing more crypto indices in the future, which will optimistically result in investable indices and might lead to further products.”

Leo Jakobson, Modern Consensus senior editor, is a New York-based journalist who has spent much of the last 15 years covering the employee engagement and recognition business. Before that he covered the East Coast side of the Internet boom and bust, and wrote about politics in New York City. Disclosure: Jakobson owns no cryptocurrencies.

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