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Bloomberg to Launch a Crypto Index
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Bloomberg to Launch a Crypto Index

by John M.May 10, 2018

In the world of cryptocurrencies, a lot has been going on. Cointelegraph, a respected, cryptocurrency edition that covers the latest happenings in the world of ephemeral gold has been the champion of crypto the world over.

Other services have emerged in a bid to sustain the industry. From evocative crypto platforms that are designed to address a variety of problems to more zany takes on other issues that we face on day to day basis.

Apart from that, a new behemoth has emerged – enter Bloomberg’s crypto index.

Bloomberg Launches the Index

 

As the interest in cryptocurrency increases, you will see that Bloomberg is now on the job. The Bloomberg Galaxy Crypto Index (BGCI) is very much alive and kicking and this may empower some investors that have long been looking for a way to set a firm foothold into the crypto industry without having to worry too much about anything in particular.

Let us have a closer look at the BGCI first. It is a market-cap weighted index, which automatically means that cryptocurrencies with the higher market cap will naturally rank up the list. The BGCI will include up to 12 cryptocurrencies, which is a clever move, given how volatile and transitional some of them can be.

Those cryptocurrencies will also have to be traded in US dollar. In its initial stage, the project will include just ten cryptocurrencies, with bitcoin, ethereum, monero, ripple, and Zcash to the fore.

The index does not only seek to add cryptocurrencies that rank way on the value chart. Quite to the contrary, variety is key to the success of cryptocurrencies and serious analytical tools that target cryptocurrencies. To begin with, ethereum will bring along smart contracts whereas bitcoin will be representative of the whole blockchain.

But the index will also include the all-known monero, which despite its popularity likes to keep a low profile and ensure that everything is okay. As the index will be reconstituted every month, the maximum weight can range between a cap of 30% and a threshold of 1%.

In the beginning, the index will look similar to this:

Cryptocurrency     ​​Weightings
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%

What about the Others?

 

It is a good question to ask. There are, after all, more currencies out there that merit your attention and those should be also doted upon copiously and carefully. Bloomberg’s entry in the field will create the ‘first institutional grade benchmark for the concurrency market.’

This in turn may transition for renewed incentive for investors who seek to plonk down hard-earned currency on concurrency. Wondering if it’s worth it? By all estimates, this is a big yes. The crypto sector is quite young and regulations need not only come from governments and central banks as such.

It will be quite useful to have big companies and respected publications share their two cents about what has been transpiring in the industry.

The plurality of regulation will also lead to a more balanced sector where while everyone will still very much have a say, not everyone will be able to stilt information & data any which way they please.

The Dangers!

 

Even if this sounds reassuring, we ought to remind you one key metric about the future of cryptocurrencies. It is dangerous to invest in them, because nobody really knows  what the outcome of the investment would be.

In fact, there is no way of successfully calling it as it is simply grossly impossible to call it. You will be absolutely thrilled with yourself if you score big, but you will be relegated to the doldrums if your crypto investment has turned out bad.

Either way, the Bloomberg index is here to offer you help and security, every step of the way. We wish you good luck with it.

According to Bloomberg global product manager for indiices: 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 index is definitely a glimmer of hope in its own right. Perhaps one day crypto investments will be much more secure as a result.

About The Author
John M.

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