Stock market index provider FTSE Russell is broadening its indexing capabilities to include digital assets and onchain data, a move the company said reflects growing institutional interest in cryptocurrencies.
According to the Jan. 28 announcement, FTSE Russell has partnered with blockchain data provider SonarX to create new indexes and data products.
By providing crypto-focused data, FTSE Russell plans to “better serve the needs of our institutional client base,” said Kristen Mierzwa, the company’s head of digital assets.
Specifically, FTSE Russell plans to use onchain metrics and market data on various cryptocurrencies to build fundamentally weighted indexes, which are a type of index whose constituents are chosen based on fundamental factors.
In traditional finance, these indexes typically provide a benchmark for passively managed investment funds.
A FTSE Russell spokesperson told Cointelegraph that, “Institutional investors are asking for more data and information [on cryptocurrencies] than in previous years.” Specifically, they are “interested in understanding the onchain data [...] that could help inform what is the intrinsic value of various protocols.”
Traditional financial circles have been broadening their coverage of cryptocurrencies in recent years, with Bloomberg Terminal adding over 50 digital assets back in 2022.
In 2023, FTSE partnered with digital asset manager Grayscale to offer an index series covering cryptocurrencies, smart contract platforms and other segments of the industry.
Various Russell Indexes and their long-term performance. Source: London Stock Exchange Group
FTSE Russell is backed by the London Stock Exchange Group and currently provides over 20 stock market indexes. The Russell Indexes allow investors to track various segments of the global stock market, with the Russell 2000 index of US small-cap stocks arguably the most popular.
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Institutional adoption on the rise
As far as institutional adoption is concerned, 2024 was crypto’s biggest year yet. Much of that is owed to the successful launch of several US spot Bitcoin (BTC) exchange-traded funds (ETFs), which have so far attracted more than $120 billion in assets under management, according to Dune.
Bitcoin ETF issuers have had a highly successful 12 months. Source: Dune
The approval and launch of spot Ether (ETH) ETFs was more muted in 2024, but analysts say it’s only a matter of time before institutions begin allocating to the no. 2 cryptocurrency.
The Ether ETFs saw more than $3 billion in cumulative inflows in the final two months of 2024, with Galaxy Digital forecasting that trend to intensify this year. The investment manager forecasts net inflows into ETH funds to reach nearly $5 billion between January and May.
Meanwhile, Grayscale executive Dave LaValle has predicted that the success of crypto ETFs will spawn new product offerings in the near future.
“We’re going to see a number of more single asset products, and then also certainly some index-based and diversified products,” LaValle predicted last summer.