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The purpose of the index will be to track the largest components of the cryptocurrency market, and is market cap weighted by the 10 top US traded cryptocurrencies.
Amidst the rising popularity of digital currencies, Bloomberg can officially be added to the growing list of cryptocurrency indexes.
The outlet announced on Wednesday (May 9) that it and Galaxy Digital Capital Management LP launched the Bloomberg Galaxy Crypto Index (BGCI), which will monitor the performance of “the largest, most liquid portion of the cryptocurrency market.”
According to the announcement, the index is market cap weighted, and will measure the performance of the 10 top US-traded cryptocurrencies, including Bitcoin, Ethereum, Monero, Ripple and Zcash.
“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,” the announcement read.
The companies said the index will will use a “rules-based methodology and data” that have gone through Bloomberg’s and Galaxy Digital Capital Management’s “due diligence process,” although no further details were provided.
Alan Campbell, global project manager for Bloomberg Indices, said the new index will bring “unprecedented transparency” to the crypto space.
As it currently stands, the top five cryptocurrencies on the index are weighted as follows: Bitcoin at 30 percent; Ethereum, also at 30 percent; Ripple with 14.14 percent; Bitcoin Cash at 10.65 percent; and EOS at 6.11 percent. The remaining five out of the 10 top cryptocurrencies the index tracks all have weightings of less than five percent.
The BGCI isn’t the only cryptocurrency index to be launched recently. Dunamu, which operates the Upbit cryptocurrency exchange on South Korea, also announced on May 9 the launch of the Upbit Cryptocurrency Index (UBCI).
According to Business Korea, the purpose of the index will be to “grasp the movements of the cryptocurrency market.”
Indeed, it’s been a volatile year for the cryptocurrency space, although some momentum has been recovered in recent weeks. As of 5:44 p.m. EST on Thursday (May 10) crypto-favorite bitcoin had a price of $9,138.64, down 1.79 percent over a 24-hour period. Ethereum dipped 1.33 percent to $741.68, Ripple dropped to $0.78 percent–or 2.70 percent; Bitcoin Cash took a 4.21 percent hit to $1,574.06 and EOS had a slight increase of 0.48 percent to $17.90, all over a one-day period.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.