Bloomberg, the financial news agency and one the world's largest providers of financial data for use by professional investors, recently launched a cryptocurrency index.
In partnership with Galaxy Digital Capital Management LP, a leading digital asset management firm founded by Michael Novogratz, New York-based Bloomberg launched the Bloomberg Galaxy Crypto Index (BGCI).
The new index is cap-weighted, meaning it is heavily allocated to the largest digital currencies. Cap-weighted indexes assign the largest weights to the securities with the largest market values and smaller weights to those with smaller market caps.
BGCI “measures the performance of ten USD-traded cryptocurrencies, including Bitcoin, Ethereum, Monero, Ripple, and Zcash,” according to a statement. “The index constituents are diversified across different categories of digital assets, including stores of value, mediums of exchange, smart contract protocols, and privacy assets.”
Burgeoning Index Business
An array of crypto-related benchmarks have popped up in recent weeks. Just a couple of weeks ago, Fundstrat Global Advisors LLC, the investment management firm co-founded by noted bitcoin bull Thomas Lee, said it is launching five new cryptocurrency indexes. Many existing cryptocurrency indexes are heavy on the likes of Bitcoin, Bitcoin cash, Litecoin, Monero and Zcash.
BGCI allocates 30% of its weight to Bitcoin and 30% to Ethereum. Ripple and Bitcoin cash are the other digital currencies receiving double-digit weights in the new benchmark.
“The creation of the index marks an important step in the evolution of the digital assets space, facilitating diversified exposure as well as independent benchmarking for investors,” according to the statement. “The BGCI utilizes a rules-based methodology and data from sources that have passed both Bloomberg and Galaxy Digital Capital Management’s due diligence processes.”
Overall, 10 digital currencies are featured in the new index.