What Is Bitcoin Worth? There Is Little Consensus in Fragmented Market

The fractured marketplace has prompted the introduction of a new crop of tools to help investors track the burgeoning, volatile industry. Since bitcoin exploded in popularity again this fall, S&P Dow Jones Indices has said it would create cryptocurrency indexes. Other firms have launched a bitcoin-volatility index and a tool that aims to be the Bloomberg screen of the crypto industry.

“That’s the biggest problem for trading, getting that historical data,” said Anthony Denier, the chief executive of trading platform Webull Financial LLC, which began allowing its clients to trade cryptocurrencies last month. “Where do you pull the data from? There’s no NYSE, no

ICE

or Nasdaq that will match up exactly with every other provider.”

The discrepancies in the bitcoin data reflect the nature of the industry itself. Bitcoin and hundreds of other cryptocurrencies trade on independent exchanges around the world. Every exchange manages its own data feed, comprising millions of trades. Some are regulated and transparent; others are notorious for unreliable volume numbers and fraudulent trading.

In traditional capital markets, exchanges like the New York Stock Exchange and

Nasdaq Stock Market

provide troves of data that help investors value the underlying assets in mutual, index and exchange-traded funds. That doesn’t exist in the crypto market.

Startups like Messari, CryptoCompare, CoinDesk and others have been trying to aggregate data within the industry for years, but as the market grows, traditional companies, like S&P, are jumping in.

S&P unveiled a partnership with the crypto-data provider Lukka earlier this month to create a suite of indexing products for cryptocurrencies. Although details about the projects are scarce, Peter Roffman, the global head of innovation and strategy at S&P, said the company plans to launch a couple of products early next year and create other lines of index products over time.

What mainly exists currently, he said, are market-data feeds that average prices across a number of exchanges. That makes it difficult to come up with an acceptable definition of fair-market value.

“Our goal is to create transparency in markets that investors have interest in,” he said. “Something that I think a lot of people and organizations don’t realize is that crypto is different than traditional markets.”

There is a potential profit to be made in providing these services. The firms involved make money by licensing the data to companies that will use them to build financial products like index funds. And with bitcoin’s marketplace growing, the opportunity grows as well.

“The demand for data has increased substantially,” said

Charles Hayter,

the CEO of London-based CryptoCompare. His firm licenses about 50 index products world-wide, and selling data brings in about half of its revenue.

This month, CryptoCompare launched a bitcoin-based volatility index, similar to the volatility index created by

Cboe Global Markets Inc.

to measure volatility in stocks. This BVIX operates much like the CBOE’s VIX. It is a measure of implied volatility in bitcoin based on options trading on a European exchange called Deribit.

Messari is another firm that has tried to sift out unreliable exchange data. It created an index that pulls data from 10 exchanges it rates as reliable and builds volume, price and market-capitalization numbers from them.

The firm also recently rebuilt its website to operate as a comprehensive data feed for investors, something it hopes will become for crypto investors what the Bloomberg terminal is for traditional investors.

“The question becomes, are you going to go to 20 different walled gardens to hunt and peck and aggregate, or will it be one portal?” said Ryan Selkis, Messari’s founder and CEO.

Write to Paul Vigna at paul.vigna@wsj.com