Bloomberg is teaming up with Mike Novogratz’ Galaxy Digital Capital Management to launch a cryptocurrency index.
The media giant announced the move yesterday, saying that the Bloomberg Galaxy Crypto Index (BGCI) “is designed to track the performance of the largest, most liquid portion of the cryptocurrency market”. Bloomberg further explained that the BGCI was a capitalisation-weighted index that measured the performance of 10 USD-traded digital currencies, including Bitcoin (BTC), Ethereum (ETH), Monero (XMR), Ripple (XRP) and Zcash (ZEC). The index constituents were chosen from different categories of digital assets including stores of value, mediums of exchange, smart contract protocols, and privacy assets.
The company also revealed that the index utilised a rules-based methodology and data from sources that had passed both Bloomberg’s and Galaxy Digital Capital Management’s due diligence processes.
The announcement described the BGCI launch as marking “an important step in the evolution of the digital assets space”, while Alan Campbell, global product manager for Bloomberg Indices, said that it reflected “our clients’ growing interest in cryptocurrencies”.
“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,” Campbell added.
Mike Novogratz, who is the founder and chief executive officer of Galaxy Digital Capital Management, echoed this sentiment, saying that the index “brings unprecedented transparency to the crypto markets”. Novogratz later wrote on Twitter:
“So excited to announce our partnership with Bloomberg. The herd is on the move. This is an important piece of the architecture that institutional accounts need to treat crypto as a new asset class.”
A former fund manager at investment firm Fortress Investment Group, Novogratz is now one of the most vocal bulls in the cryptocurrency space. Following the launch of BGCI, Novogratz appeared on CNN’s “Markets Now” programme, where he argued that it was “almost essential for every investor to have at least 1% to 2% of their portfolio” in digital currencies. He also predicted that the New York Stock Exchange would be involved in cryptocurrency trading within six months.