One of bitcoin’s biggest bulls has inked a deal with an unlikely partner to create a cryptocurrency price index.
Billionaire Mike Novogratz and Bloomberg LP on Wednesday announced that they are teaming up to launch the Bloomberg Galaxy Crypto Index (BGCI), which will track the aggregate performance of a basket of large-cap cryptocurrencies.
"Today's launch of the Bloomberg Galaxy Crypto Index reflects our clients' growing interest in cryptocurrencies," said Alan Campbell, Global Product Manager for Bloomberg Indices. "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."
Novogratz, a former hedge fund manager at Fortress Investment Group, recently raised $250 million to create a “cryptocurrency merchant bank” that will be publicly-listed in Canada.
He said that the cryptocurrency price index will bring “unprecedented transparency” to the markets.
"The Bloomberg Galaxy Crypto Index brings unprecedented transparency to the crypto markets. We are excited to help drive the decentralized revolution forward through the creation of BGCI."
At launch, the BGCI tracks ten cryptocurrencies, which are weighted based on market cap as well as other factors. They are: bitcoin (30%), ethereum (30%), XRP (14.14%), bitcoin cash (10.65%), EOS (6.11%), litecoin (3.77%), dash (1.67%), monero (1.66%), ethereum classic (1%), and zcash (1%).
The index marks yet another move toward making the nascent cryptocurrency trading market more palatable to mainstream financial institutions.
Coinbase and Grayscale each launched cryptocurrency index funds earlier this year, as have lesser-known firms, including Bitwise Asset Management.
Additionally, cryptocurrency startup Blockstream partnered with Intercontinental Exchange (ICE) -- the owner of the New York Stock Exchange (NYSE) -- to create a cryptocurrency data feed built for institutional clients.
Most recently, Wall Street strategist Fundstrat unveiled five cryptocurrency indices, each of which tracks a different sector of the market.
The index's launch also shines an ironic light on past statements from Bloomberg founder and majority shareholder Michael Bloomberg, who is a card-carrying member of the “blockchain not bitcoin” brigade.
Last November, Bloomberg joined Goldman Sachs CEO Lloyd Blankfein in an interview in which the two businessmen took turns bashing cryptocurrencies.
In the past week, however, both companies have unveiled products that indicate that others in their firms think otherwise: Bloomberg, a cryptocurrency price index; Goldman, a bitcoin trading desk.
Featured Image from YouTube/Bloomberg.