The cryptocurrency naysayers were dealt yet another blow this month, when Bloomberg announced it would partner with crypto-focused Galaxy Digital Capital to launch a cryptocurrency benchmark index. Known as the Bloomberg Galaxy Crypto Index, it will serve as a performance tracker for ten of the largest cryptocurrencies, including Bitcoin, Ethereum, Monero, Ripple, and Zcash.
The move is a legitimizing one for the digital assets space, which continues its evolution towards a full-fledged digital economy that could supplant conventional finance. The fact that a benchmark for investors was so in demand should be indication enough that the cryptocurrency markets are here to stay.
“Today’s launch of the Bloomberg Galaxy Crypto Index reflects our clients’ growing interest in cryptocurrencies,” Alan Campbell, Global Product Manager for Bloomberg Indices, said in a statement. “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 Bloomberg Galaxy Crypto Index will roll out with ten cryptocurrencies initially:
· Bitcoin Cash
· Ethereum Classic
Bloomberg and Galaxy Digital Capital aren’t the only large institutions betting on cryptocurrency’s staying power, either. Coupled with news that major players like the Intercontinental Exchange, Goldman Sachs, Nasdaq, and the CME Group are all jumping into the digital assets space, Bloomberg’s announcement is just one in a series of moves that normalize the industry.
“The rush of institutional capital is no real surprise; cryptocurrency is a verifiable threat to conventional models, given its decentralized nature, reduced transaction fees, and quicker confirmations,” said Serge Beck, CEO of Optherium. “As companies like ours integrate the traditional and digital economies with novel solutions that make fiat and digital transactions seamless, it’s becoming clear to these institutions that if you can’t beat crypto, you’ve got to join it.”
While acceptance of cryptocurrency in Wall Street circles is encouraging from an adoption standpoint, it remains to be seen whether it will influence development of the digital economy. For now, the recognition and support is welcome, but cryptocurrencies value lies in its ability to undermine centralized transactions. In order to retain its mass market appeal, Wall Street needs to respect cryptocurrency’s autonomy. In the short term, however, increased adoption and new avenues for big investors can only mean good things for crypto values.