HashKey, FTSE Russell team up to offer ‘more nuanced’ crypto exposure

HashKey Capital has linked up with index management giant FTSE Russell to give investors crypto exposure beyond the industry’s major assets.

The Hong Kong-based crypto firm worked with London Stock Exchange Group affiliate FTSE Russell to develop three indexes tracking the performance of a range of crypto assets.

Such assets “align with more nuanced investment strategies” across different crypto segments and market capitalizations, the company said Wednesday.

While one index tracks the top 20 crypto assets based on market capitalization, another targets assets comprising the ecosystem’s infrastructure layer — related to smart contract platforms and protocol interoperability, for example.

A third benchmark focuses on crypto assets with “application functionalities,” such as ones associated with staking instruments and decentralized finance.

The index launches follow the Securities and Exchange Commission’s landmark approval of spot bitcoin ETFs in the US. The products give investors an easier access point to the crypto market’s largest asset, which currently has a market capitalization of roughly $780 billion.

A US spot ether ETF could come later in 2024, some industry watchers believe. The SEC is slated to rule on one or more such proposed funds by May.

But HashKey Capital managing director Deng Chao said in a statement there has been “a significant surge in demand from investors who want to diversify their portfolios beyond the established cryptocurrencies.”

FTSE Russell partnered with Grayscale Investments in October as part of a similar effort to boost crypto diversification. Those indexes were set to focus on a range of crypto sectors: currencies; smart contract platforms; financials; consumer and culture; and utilities and services.

The new indexes also come after Haskey Capital parent company HashKey Group raised $100 million in a Series A funding round at a $1.2 billion valuation. OKX Ventures participated in the round, Bloomberg reported.

HashKey Group said at the time the capital would be used to accelerate product diversification for its Hong Kong business, as well as to “drive the group’s compliant and innovative development globally.”

Updated Jan. 24, 2024 at 11:55 pm ET: Clarified that the fundraise was by HashKey Capital’s parent company.

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