S&P Launches First-Ever Crypto Indices for Bitcoin and Ethereum: Why It Matters

The Bitcoinist ^ | May 7, 2021 | San Lee

[aMorePerfectUnion]

S&P Dow Jones Indices, one of the world’s largest index providers, launched a new series of digital asset benchmarks.

Dubbed the S&P Digital Market Indices, the series includes the S&P Bitcoin Index, Ethereum Index, and Cryptocurrency MegaCap Index. Each of these indices will track the performance of Bitcoin and Ethereum, with the latter tracking a combination of both. The pricing data is sourced from crypto data provider Lukka.

Despite choosing to only include the two largest cryptocurrencies by market capitalization, S&P stated that it will include other cryptocurrencies through large-cap and broad market indices. According to CoinMarketCap, Bitcoin and Ethereum lead the space with market cap of $1.04 billion and $395 million, respectively. Binance Coin (BNB) is a distant third at $95 million.

Why S&P’s Digital Market Indices May Be Integral

Indices play an integral role in the public market structure, providing insight and more importantly, powering tradable products. With the introduction of S&P’s latest indices, institutions could build their own derivatives without directly owning the underlying crypto assets.

[Lurkina.n.Learnin]

Will an ETF follow?

[Pollard]

There’s supposed to be some utility in crypto. I saw a video with four guys on four different continents and they sent $100 USDC, around the world on the ALGO network in less than two minutes at a cost of $0.40 or $0.10 per peer to peer transaction.

You can’t do that with USD that cheap and $100 in Bitcoin might have been $90 in Bitcoin two minutes later.

That’s one use of stable coins. Another is if some financial/crypto news comes out and you think the crypto market is going to tumble because of the news, you can convert your non-stable coin to stable coin as a safe haven and it costs less than cashing out to USD.

[aMorePerfectUnion]

In the US, several firms are competing to offer an ETF.

Grayscale has two trusts that trade as stocks now:

GBTC - Bitcoin trust
ETHE - Ethereum Trust.
There are two (I think) ETNs

There are currently ETFs that invest in blockchain businesses:

“ blockchain ETFs in the market including the Amplify Transformational Data Sharing ETF (NYSEARCA: BLOK) and the Innovation Shares NextGen Protocol ETF (NYSEARCA: KOIN).”

Also, you might look into:

BITW – The Bitwise 10 Private Index Fund
BTCE – BTCetc Physical Bitcoin ETC
CXBTF – Bitcoin Tracker One

In other countries, Canada has approved a BTC ETF.

“ The Purpose Bitcoin ETF (BTCC) trades on the Toronto Stock Exchange (TSX) and is available in $CAD (FX hedged and unhedged) and in $USD (unhedged).”

Also on Toronto Exchange:

EBIT – Evolve Bitcoin ETF

BTCX – CI Galaxy Bitcoin ETF

Somewhere I read about a Brazil BTC ETF too.

[aMorePerfectUnion]

“ A big issue I see with them is the volatility. How can you price goods to a currency that has increased in “value” all over the place?”

Really more of an asset than a currency…

There are stable coins that are closer to currencies.

I note that the US dollar is declining in purchasing power every year for decades.

Crypto has increased its purchasing power.

So it isn’t just about stability.

[Lurkina.n.Learnin]

Thanks. I knew about GBTC but none of the others.

[SunkenCiv]

Heh.

https://www.coindesk.com/market-wrap-doge-memecoin-jumps-ether-bitcoin-rise
https://www.coindesk.com/price/bitcoin
https://www.coindesk.com/price/dogecoin
https://www.coindesk.com/price/ethereum

[SunkenCiv]

[singing] We get wild, wild, wild...

[Svartalfiar]

There are stable coins that are closer to currencies.

I note that the US dollar is declining in purchasing power every year for decades.

Crypto has increased its purchasing power.

Yes, but those stable coins are only stable because they're based on, or directly tied to, the dollar or other national currencies. If they (stable coin) replaced the actual currency for usage everywhere, they wouldn't be stable any more because the only thing that stabilizes them, the currency, would be gone.

Yes, the dollar has declined in purchasing power for a long time, but that is mostly just natural inflation of a currency. And it's based on government policies and interest rates and so on. Actual stuff causes those values to rise and fall. Crypto currencies fluctuate wildly because there's nothing that their value is based on, except the fact that it's crypto and has value because hell, why not? Crypto's purchasing power (where accepted) has increased greatly in a short time frame. But based on what? There is nothing actually increasing the value of the crypto, aside from the crypto itself. Nothing else has actually increased in value that would cause the crypto to do so. You say it's an asset - sure, though I'd say it's merely a paper asset, but it's not even that. It's basically a valueless store of value.

[Svartalfiar]

There’s supposed to be some utility in crypto. I saw a video with four guys on four different continents and they sent $100 USDC, around the world on the ALGO network in less than two minutes at a cost of $0.40 or $0.10 per peer to peer transaction.

You can’t do that with USD that cheap and $100 in Bitcoin might have been $90 in Bitcoin two minutes later.

That’s one use of stable coins. Another is if some financial/crypto news comes out and you think the crypto market is going to tumble because of the news, you can convert your non-stable coin to stable coin as a safe haven and it costs less than cashing out to USD.

There could be that utility with regular money, but different governments are always trying to grab their slice of the pie. Sure, I do agree that crypto currencies have some benefits like the ability to easily transfer money around the world in seconds, but that's not enough reason to value it at the ridiculous values many of them have. The only reason it's cheaper than switching to dollars is because the institutions choose to charge those prices. Converting bitcoin to either is the same physical cost as most of it's electronically transacted anyway. Dollars don't have to cost more than dollar coins.

But a big part of my point is in my post above: they aren't practical for actual daily use because that value is so unstable. Ignoring ones like bitcoin, what happens to dollar coins if they replace dollars? Dollars disappear, now there's nothing (or a worthless something) for the dollar coins to be tied to, leading to them freefalling exactly the same. Those stable coins are still dependent on national currency for their stability.

[aMorePerfectUnion]

“ Yes, the dollar has declined in purchasing power for a long time, but that is mostly just natural inflation of a currency.

The purchasing power of the US dollar is inflated away purposefully as a matter of economic policy.

Every year, it buys less.

In fact, since 1900. The US dollar has lost 95% of it’s purchasing power.

http://www.freegrab.net/dollar%20OST3.jpg

[bert]

No, paper money is the abstraction.

Gold and silver are the tradeable hard currencies. Contrary to the notion of the modern gullibles, both have intrinsic value and always have.

The world problem is that there is not enough gold and silver at hand to carry out trade locally or nationally or internationally.

It should be noted that to settle trade between nations, gold is transferred from one country’s vault of the NY Federal Reserve to the vault of another country. similarly, transactions occur at other locations, Switzerland for instance

A tangible paper substitute for physical gold is gold miner stock. That is the paper is backed by gold still in the ground.

The US$ is already electronic currency. the US$ is nothing more than electrons captured on millions and millions of electronic ledgers at businesses, banks and guess what.....I Phones.

And now for something completely different.....

During the recent hurricane that destroyed the New Jersy shore and parts of Staten Island, the water level rose considerably. There was fear and a near miss when the water did not rise high enough to flood those gold vaults. The Manhattan vaults are vulnerable to high water

[SecondAmendment]

Fiat currencies have one enormous advantage over any of the current cryptocurrencies ... the force of law backed by violence (police and/or military).

Thus Bitcoin, Ethereum, etc will always remain a curiosity since money IS a social contract.

P.S. Buried in the technical details of the Bitcoin white paper are some very concerning qualifications about trust and mining in which a malfeasant actor could tamper with the blockchain at will if they controlled a majority of mining nodes.

Good thing there aren't any secret organizations with unlimited resources around who could do this ....

[aMorePerfectUnion]

All pretty true - but for holding us dollars you have a guaranteed loss because malfeasant government approved actors are systematically destroying it as a policy.

Don’t oppose the policy of destruction though. It is backed by the force of law and violence (police and/or military).

To me, it isn’t crypto or dollars or gold or stocks, or real estate.

We own them all.

And in more than one legal jurisdiction.

And as the US dollar is destroyed, we have added significant positions in crypto, gold, and silver.