In recent scenario, there is an increase in interest in the cryptocurrency markets. Bloomberg, which is a global leader and the leading data providers and index services have shown some interest in this market and have launched the Bloomberg Galaxy Crypto Index (BGCI), which is “designed to track the performance of the largest and the most liquid portion of the cryptocurrency market.”
The BGCI-Major Market-Cap Index
The BGCI is the market cap weighted index which shows that the cryptocurrencies that have high market will have a higher weight in the index. BGCI will have a maximum of 12 cryptocurrencies which are usually traded in U.S. dollars. When this was launched, it has about ten cryptocurrencies which include bitcoin, Ethereum, ZCash, Monterio, and ripple. This type of index shows various forms of cryptocurrencies which include a storage medium of monetary value and value exchange mediums, for example, instance, bitcoin, smart contract protocols like ethereum and digital assets which are privacy-focused like Monero.
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All these will be well-balanced and will be reconstituted monthly, and each of them will be the constituent weight which will range from maximum 30 percent to minimum 1 percent. If any of the cryptocurrency undergoes any type of hard work, then it will lead to the birth of the new cryptocurrency. The rule which is mentioned above will be applying for each new qualifying entry in the index to both child and parent cryptocurrency.
The index of the cryptocurrency starts from a base value of 1,000 as on May 3rd, 2018. When it is launch, it has the following constituents:
The Bloomberg Galaxy Crypto Index will offer a single value indicative of the performance of the top virtual currencies like Dow and S&P 500. This index will be joining the family of other indexes which is administered by the Bloomberg Index Services Limited. Galaxy Digital Management will be helping in co-branding the cryptocurrency.
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Inspite of other cryptocurrency market indexes, Bloomberg launch shows that the company is going to enter and will play a major role in making “The first institutional grade benchmark for the cryptocurrency market.” the other known indexes include Cryptocurrency Index 30 (CCi30), which helps in tracking the top 30 cryptocurrencies with the largest market capitalization and it is rebalanced monthly and Crypto Index (CRIX) and it includes 20 constituents which are based on a statistical methodology.
According to the Alan Campbell, who is the global product manager for the Bloomberg Indices said, “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.”
Michael Novogratz, who is the CEO and also the founder of the Galaxy Digital Capital Management said, “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.”