Bit Of Background
Bloomberg is one of the biggest players in finance and provides indices to the worldwide investment industry. These indices, in turn, assist with vital benchmarking data, which are fundamental to finance. These unbiased indices support all kinds of companies globally.
Bloomberg is no beginner to indices and in fact already manage many indices in the more traditional finance industry including fixed income, commodities and international fiat currencies.
Bloomberg has now teamed up with, digital assets merchant bank, Galaxy Digital Capital Management to roll out the first Cryptocurrency index. Galaxy is well known globally and is directed by billionaire Michael Novogratz – the ex-hedge fund manager.
The New Index
This new index – the Bloomberg Galaxy Crypto Index (BGCI) – will focus on Bitcoin, Ethereum, Ethereum Classic, Litecoin, Monero, XRP, Zcash, EOS, and dash. Together these form the biggest section of the Cryptocurrency market. The breakdown of weightings is as follows:
• Bitcoin – 30.00%
• Ethereum – 30.00%
• Ripple – 14.14%
• Bitcoin Cash – 10.65%
• EOS – 6.11%
• Litecoin – 3.77%
• Dash – 1.67%
• Monero – 1.66%
• Ethereum Classic – 1.00%
• Zcash – 1.00%
The index, which is capitalization-weighted, will work on a rules-based methodology. The sources of this data have not been released by either company or the announcement of this new index. What is for sure is that the information that the index will rely on will have been thoroughly investigated during the research stage of this new index and there will most certainly be no room for mistake or question of doubt with the accuracy of the details provided and used. All due diligence will have been checked and double-checked before the next steps were taken. Both companies behind BGCI are extremely well respected and knowledgeable in the finance industry and will ensure that no stone has been left unturned.
As with all other indices, the BGCI will provide companies and investors around the world with the vital information that they need to analyze and review the performance of the market. The importance is that the index is completely unambiguous and open for the companies, which is imperative.
As highlighted by Bloomberg in their announcement, the BGCI is spread across several digital assets which incorporate stores of value, privacy assets and smart contracts to name a few. Bloomberg was keen to release this index to reflect the needs of their clients and support them going forward with the Cryptocurrency decentralized industry. The BGCI provides a great and very strong base for the industry to develop further.
The release of BGCI really does send a clear message to the market that Cryptocurrencies are the next generation of finance and are to be taking seriously. This really does show the world now that Cryptocurrencies are a permanent feature with the introduction of this new index, not only financial institutions but also governments need to heed this. The index also promotes the Cryptocurrencies further and offers more marketing to new and possibly unseen potential investors. Further exposure is certainly a huge positive and can only be seen as another massive benefit to the index being released in the first place.