Bloomberg gives Wall Street a crypto index

Posted: 10 May 2018 3:47 pm

Bloomberg's new crypto index

Wall Street investors who want in on cryptocurrencies now have a benchmark from a familiar name.

Bloomberg announced Wednesday that it has partnered with digital asset management firm Galaxy Digital Capital Management to create the Bloomberg Galaxy Crypto Index (BGCI) for tracking the front line in the growing “decentralized revolution”, as Galaxy CEO Michael Novogratz put it.

The index, considered the first institutional-grade crypto benchmark, will be weighted by market capitalization and aggregate the prices of 10 of the largest and most liquid cryptocurrencies, including bitcoin, Ethereum, Monero, Ripple and Zcash. Furthermore, Bloomberg promises to diversify the index constituents across multiple digital asset classes: stores of value, mediums of exchange, smart-contract protocols and privacy assets.

Cryptocurrency Index weighting
Bitcoin (BTC) 30.00%
Ethereum (ETH) 30.00%
Ripple (XRP) 14.14%
Bitcoin Cash (BCH) 10.65%
EOS 6.11%
Litecoin (LTC) 3.77%
Dash (DASH) 1.67%
Monero (XMR) 1.66%
Ethereum Classic (ETC) 1.00%
Zcash (ZEC) 1.00%

Wall Street players have become increasingly involved in the cryptocurrency space in recent months, with the Chicago Board Options Exchange launching and Goldman Sachs developing bitcoin futures, the CBOE pushing for bitcoin ETFs and the only CFTC-regulated swap exchange, trueEX, developing a benchmark Ether price for future derivatives.

“Today’s launch of the Bloomberg Galaxy Crypto Index reflects our clients’ growing interest in cryptocurrencies,” Bloomberg Indices Global Product Manager Alan Campbell said. “The index brings our rigorous approach to index construction to cryptos and will provide investors with a transparent benchmark to gauge the performance of the broader market.”

Bloomberg did not reveal the sources of its cryptocurrency price information, though Galaxy Head of Asset Management said “the index’s independent, rules-based methodology provides a strong foundation on which the cryptocurrency ecosystem will continue to grow and mature”.

The arrival of institutional investment in the cryptocurrency market is anticipated by many on and off Wall Street, and at least one analyst believes we’re due for “inflows of big money into crypto”.

Learn more about bitcoin and more than 100 of the leading altcoins in our index of in-depth cryptocurrency guides and comparisons.

Disclosure: At the time of writing, the author holds DRGN.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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