A blue-chip focus means the new index does not just select the largest crypto assets by market capitalization, as is customary with other indices, but instead considers crypto-native metrics including the level of adoption, total value secured, the size of the developer community, the fees paid by users and the age of the protocol.
More investment institutions are turning to digital assets for strategic objectives such as portfolio diversification, and as enhanced, institutional-grade infrastructure and clearer regulation make market fundamentals more attractive to a larger breed of investors. After a bout of market volatility in 2022, asset prices have recovered in 2023, and the crypto market is now valued at USD 1.45 trillion.
In a survey of over 250 investment institutions conducted by Ernst & Young, 60% of respondents indicated they allocate more than 1% of their portfolio to digital assets and/or related products. Over two-thirds of respondents (69%) said they plan to increase the holdings in the next two to three years.
Just below half of professional investors polled in another survey this year, conducted by Trackinsight, said they would consider investing in single- and multi-cryptocurrency ETPs. A smaller 37% indicated they would be willing to invest directly in cryptocurrencies.