Galaxy Digital Management LP, the brain-child of Mike Novogratz has signed a partnership with Bloomberg to create a cryptocurrency index platform. This partnership is Novogratz’s latest attempt to legitimize the cryptocurrency market to attract more institutional investors. The former Goldman Sachs executive is considered to be one of the biggest Bitcoin proponents in the world. He recently revealed plans to launch a crypto merchant bank registered in Canada.
The name of cryptocurrency benchmark service is the Bloomberg Galaxy Cryptocurrency Index (BCGI). It is an institutional-grade cryptocurrency indexing service that will employ industry best-practices obtainable in the mainstream market arena. The BCGI operates as part of the Bloomberg index family. Commenting on the platform, the Bloomberg Indices Product Manager, Alan Campbell said:
“Today’s launch of the Bloomberg Galaxy Crypto Index reflects 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.”
The BGCI tracks and monitors the performance of a basket of ten cryptocurrencies. These cryptos are selected based on their market capitalization values. At the start of the index, the ten tokens are Bitcoin, Ethereum, Ripple, and Bitcoin Cash, EOS, Litecoin, Dash, Monero, Ethereum Classic, and Zcash. The BGCI operates based on a weighted market cap methodology under strict quality standards. Galaxy Digital and Bloomberg vet all data used in the index.
The ten cryptos monitored by the index are on different weight percentages. No cryptocurrency can have a weight percentage above 30 percent or below one percent. The BGCI also covers cryptocurrencies across the various divisions of tokens such as smart contract tokens, stores of value, privacy assets, as well as mediums of exchange. Speaking on the BGCI, Steve Kurz, the Head of Asset Management at Galaxy Digital said his firm was delighted to be working with Bloomberg. He also praised the design on the index, saying that the rules-based methodology being used creates a level of transparency unseen in the crypto industry. He predicted that the BGCI would provide a strong foundation for the continued growth and evolution of the crypto ecosystem.
Kurz’s words were also echoed by Novogratz who expressed optimism on the potential success of the BGCI. The Galaxy Digital Chief believes that the index is a huge step towards improving the adoption of Bitcoin and other cryptos in the mainstream financial arena. He drew particular attention to the fact that the BGCI adopts benchmarking standards from the formal business sector, saying that:
“We wanted an institutional player for the whole ecosystem, and I think it’s important for the crypto ecosystem. You’re starting to see more institutional participation, and what they’re looking for is this architecture — here’s an index that will feel like the S&P 500 in a few months, that people can benchmark themselves against.”