Friday, May 11, 2018

Bloomberg creates new cryptocurrency index to help Wall Street as they prepare for crypto index funds

In a move to take advantage of billions of dollars in institutional money looking for investments outside of equities, Bloomberg announced on May 10 that they have launched a new cryptocurrency index which will one day soon aid Wall Street companies bent on implementing crypto index funds.

Titled the Bloomberg Galaxy Crypto Index (BGCI), this index will weigh cryptos based primarily on market caps, with mainstays like Bitcoin and Ethereum holding the largest positions.

Amid increasing interest in the cryptocurrency markets, Bloomberg, the global leader among market data providers and index services, has launched the Bloomberg Galaxy Crypto Index (BGCI), which is “designed to track the performance of the largest, most liquid portion of the cryptocurrency market.” 
The BGCI is a market cap-weighted index, which implies that cryptocurrencies with higher market cap will have a higher weight in the index. BGCI will consist of up to a maximum of 12 cryptocurrencies that are traded in U.S. dollars. At the launch, it has 10 cryptocurrencies including bitcoinethereummoneroripple and ZCash. The index constituents cover various facets of cryptocurrencies that include mediums of storage of monetary value and mediums of value exchange (for instance, bitcoin), smart contract protocols (ethereum), and privacy-focused digital assets (monero).  - Investopedia
It was only a matter of time before enterprising companies decided to create cryptocurrency index funds since the majority of trading today, especially by retail and mutual fund investors, is done through indexes and etf's rather than with individual securities and stocks.  And Bloomberg's new Index appears to be coming online right as the industry prepares for crypto index funds since several are already now live on Wall Street.
A company called Bitwise Asset Management, has launched an index fund of cryptos called the HOLD 10 Private Index Fund, which is open to certain qualified investors for self-directed IRAs. Here's the skinny on the fund: 
-- The Fund is a market-cap-weighted fund of the 10 largest cryptocurrencies, rebalanced monthly. 
-- Assets are kept in 100% cold storage and are audited annually. 
-- The fund launched in late 2017 and is available to accredited investors, which include individuals with more than $200,000 in annual income ($300,000 for couples) or more than $1 million in net assets. 
-- The fund charges a 2.5% annual management fee, with no hidden costs or performance fees. - Forbes

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