Grayscale Investments and FTSE Russell Collaborate on Crypto Sector Index Series
Grayscale Investments, a leading crypto asset management firm, has partnered with FTSE Russell, a subsidiary of the London Stock Exchange, to introduce the Crypto Sector Index Series. This product aims to attract investors interested in cryptocurrencies by offering several indices that track the prices of different categories of digital assets based on their use cases.
The indices will cover various groups, including cryptocurrencies used as mediums of exchange or stores of value (such as bitcoin and litecoin), smart contract projects (like ether, solana, and polygon), tokens representing financial services (uniswap, compound, and curve), coins representing art, gaming, and media assets (NFT projects), and projects focused on real-life applications (chainlink, filecoin, and others).
To ensure a balanced representation of assets within each category, the indices will use the square root of each cryptocurrency’s market capitalization. This approach prevents heavily capitalized cryptocurrencies like bitcoin from disproportionately impacting the entire group and allows investors to achieve diversified exposure.
Grayscale’s Legal Troubles
Last week, New York Attorney General Letitia James filed a complaint against Grayscale’s parent company DCG, its subsidiary Genesis, crypto exchange Gemini, former Genesis CEO Michael Moro, and DCG CEO Barry Silbert. The complaint alleges that Gemini and Genesis misled the public regarding their joint product Earn.
Earn involved Gemini lending users’ funds to Genesis, which then lent those funds to counterparties like Three Arrows Capital and Alameda Research. Both companies are facing lawsuits from the SEC for their involvement in the Earn product. They are also embroiled in a legal battle over responsibility for the lost user funds.
Hot Take: Grayscale Expands Its Offering with Crypto Sector Index Series
Grayscale Investments is diversifying its product lineup by collaborating with FTSE Russell to introduce the Crypto Sector Index Series. This partnership aims to cater to crypto-curious investors by providing them with indices that track different categories of digital assets based on their use cases. By using the square root of each cryptocurrency’s market capitalization, the indices ensure a balanced representation and prevent dominant cryptocurrencies from overshadowing others. While Grayscale faces legal challenges related to its joint product Earn, this collaboration demonstrates its commitment to offering innovative investment opportunities in the crypto space.
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