Market data is ubiquitous in traditional asset classes. However, this isn’t the case in the crypto world, where hundreds of exchanges operating around the clock each use a different application programming interface. This lack of quality data — not to mention the hurdles that need to be cleared to make sense of what data is available — has hindered advisors whose clients may have expressed interest in crypto.
Spurred on by a demand for better and more usable crypto data, Venn by Two Sigma is rapidly moving to fill the need for institutional-grade digital information. Today the firm announced a collaboration with Coin Metrics to provide its platform users with reliable digital asset returns data. This comes close on the heels of last month’s news of a similar alliance with Coinbase. Calculated in USD and euros for nearly 500 crypto assets, Coin Metrics’ digital assets return data will allow Venn users to create powerful, factor-based workflows.
“The digital assets landscape is evolving rapidly. Investors are lacking the quality data they need to assess participation in this new asset class,” says Marco Della Torre, CEO of Venn by Two Sigma.
As allocators add crypto to their portfolios and gain a better understanding of the relevant impact, Coin Metrics’ independent and transparent crypto asset prices will power Venn’s factor models and scenario analysis.
Della Torre is excited about the possibilities that these institutional-grade analytics present for advisors seeking to contextualize crypto in a multi-asset portfolio. One function of the Venn platform, for example, allows advisors to run a portfolio through a past market events to determine if the portfolio’s behavior is acceptable for a client’s risk tolerance.
“Crypto has captured the imaginations of a broad spectrum of the world,” he says. “We are building the tools that will allow managers to craft their own response to the market by bringing in the workflows they are familiar with.”
The integration of Coin Metrics data into the Venn platform is just one element of a broader, ongoing strategy to support RIAs, wealth managers, family offices, and other asset allocators.
Benjamin Lev is a freelancer at RIA Intel and based in New York City.