As the world at large finally catches up with the previously-underground crypto traders, we are seeing certain market shifts. The medium is becoming more mainstream. What was once a novel concept for software programmers discussing the future of currency has now become a very real means of holding investment for many individuals worldwide.

This is evidenced in one example through the announcement of the Bloomberg Galaxy Crypto Index. Bloomberg is an information leader in tech, market trends and global data. A shift on their part symbolizes a more global attitude shift.

What is a Cryptocurrency Index and Why Does Bloomberg Having One Matter?

If you’re not familiar, a cryptocurrency index is a platform that tracks the most liquid crypto-assets. The platform tracks conversion statistics and market value for ten cryptocurrencies including:

  • Bitcoin 
  • Ethereum
  • Ripple
  • Bitcoin Cash
  • ESO
  • Litecoin
  • Dash
  • Monero
  • Ethereum Classic
  • Zcash

Bloomberg’s index maintains data on cryptocurrencies as it pertains to the USD.

The index is a result of a partnership between Bloomberg and Galaxy Digital Capital Management LP. Galaxy Digital is a digital merchant’s bank – think Bank of America but for Cryptocurrencies – founded by Michael E. Novogratz.

Novogratz has made himself known as one of the most prominent names in cryptocurrency and has a crypto-value of somewhere between $700 million and $1 billion.

Bloomberg makes a realistic claim that this is the first cryptocurrency index that has been seen at the institutional level. For this reason it is also technically the best cryptocurrency index – but, what does that mean?

While there have always been accessible, informal sources for the generalized status of cryptocurrency trading around the world, like Coinbase charts or WorldCoinIndex, Bloomberg serves as a source of information with transparent sourcing and some of the most financially intelligent individuals in the world.

Other indexes did exist in the market prior to the unveiling of Bloomberg’s, but Bloomberg is far and above a more major player in the financial sector. Examples of previously existing cryptocurrency indexes are the Crypto Currency Index 30 and CRypto IndeX.

As the Bitcoin market and other cryptocurrency markets rise, it will become more and more crucial that investors have reliable data to make buying and selling decisions based on. Once a crypto-portfolio reaches a certain value, informal and sporadic data no longer is suitable for decision making.

What Makes the Bloomberg Galaxy Crypto Index Unique

Bloomberg and Galaxy Digital stress that their “rules-based” methodology and data from various sources have passed both of their due diligence processes. Alan Campbell, Global Product Manager for Bloomberg Indices, echoed these statements.

“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,” Campbell said.

The Bloomberg Galaxy Crypto Index will work just like other popular indexes like the Dow and S&P 500. Instead of U.S.-listed companies, the index will be built around the top forms of cryptocurrency. Traditional indexes are intended to give a general overview of the stock market or a segment of it, and the BGCI will not be any different.

The index is market-weighted according to Bloomberg. This implies that cryptocurrencies having a higher market cap will be weighted more heavily on the index.

At maximum the BGCI will have 12 cryptocurrencies listed.

Bloomberg Is Not Alone

The rising interest in cryptocurrencies has not only been evidenced through the official recognition by Bloomberg. Other interest groups have taken note as well.

Earlier this month, Goldman Sachs announced their plans to buy and sell Bitcoin even announcing that it, “is not a fraud.” Goldman Sachs is one of Wall Street’s largest investment banks. In their announcement they stressed that the move is largely due to the amount of client’s requesting it.

Mike Novogratz even has a couple of former Goldman Sachs executives working for him at Galaxy Digital.

The Internal Revenue Service even recognizes “virtual currency” for federal tax purposes.

Bottom Line: A Cryptocurrency Index By a Major Player Like Bloomberg Marks a Step Towards the Future

Indexes like the Dow and S&P 500 continue to influence the most influential investors on Wall Street. As the judgment day for the feasibility of cryptocurrencies approaches, a step towards bringing cryptocurrency to the mainstream seems to be a vote in favor of keeping cryptos around.

Only time will tell of course, but Bitcoin is certainly nearing a make-or-break moment.

Because of the uncertainty, investing in cryptocurrencies should be approached with caution. The stock market has provided decades and decades of trends for investors to study to safeguard their investments, however, the newness of the cryptocurrency realm does not allow for this kind of extensive data.

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