Following today’s news (December 6) that FTSE Russell, the London Stock Exchange subsidiary that produces the FTSE 100 index, will develop a crypto index in the coming months;

George Monaghan, Analyst on the Thematic Team at GlobalData, a leading data and analytics company, offers his view:

“The writing has been on the wall for a while now: institutions cannot ignore crypto. The major banks have been opening crypto desks throughout 2021, ProShares launched the first Bitcoin ETF in October, and now there will be a full-blown index.

“The index will attract hesitant investors. This is because it mitigates the hassles associated with actually owning the coins, such as using exchanges and organizing wallets. It also spreads investment across 40 crypto assets.

“However, it cannot be said outright that such an investment is necessarily stable – they’re still crypto assets after all. The whole crypto market tends to move at once: Bitcoin and Ethereum lead, and everything else follows. Other indices are less subject to the movements of their major assets – the S&P doesn’t swing just because Tesla does. It remains to be seen whether this crypto index will be more stable than Bitcoin.”