Grayscale Investments, a crypto asset management company, is venturing into the crypto indices business together with the London-based indices provider FTSE Russell, a London Stock Exchange subsidiary.
They will join forces to offer crypto-curious investors a product called Crypto Sector Index Series, the firms announced Tuesday morning. It will include several indices tracking the prices of various buckets of digital assets according to their use cases.
The groups will include: cryptocurrencies that serve as a medium of exchange of store of value (like bitcoin, litecoin), smart contract projects (like ether, solana, polygon), tokens representing financial services (uniswap, compound, curve), coins representing art, gaming and media assets (NFT projects) and projects oriented on real-life applications (chainlink, filecoin and others), according to the announcement.
To weigh assets inside each bucket against each other, the indices will use a square root of each cryptocurrency market capitalization, said Grayscale’s director of ETFs Inkoo Kang: this way, the most capitalized ones, like bitcoin, will not have an outsized effect on the whole group, and investors will be able to get a more diverse exposure.
Last week, New York Attorney General Letitia James filed a complaint against the Grayscale parent company DCG, its other subsidiary Genesis, crypto exchange Gemini, former Genesis CEO Michael Moro and DCG CEO Barry Silbert.
The NYAG said Gemini and Genesis misled the public about its joint product Earn, for which Gemini lent users’ funds to Genesis. Genesis then lent those funds out to counterparties including the failed crypto trading funds Three Arrows Capital and Alameda Research. Both companies were also sued by the SEC for the Earn product in January and have been fighting with each other over responsibility for the lost user funds.
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