- The new index will be backed by gold and five digital assets.
- It will provide investors with low-risk exposure to the cryptocurrency market.
The cryptocurrency asset management company, CoinShares, launched a new index that is based on gold and five large-cap cryptocurrencies. The index is called Cryptoassets Index (CGCI). And available on Bloomberg terminal and Refinitiv.
Gold accounts for 68,25%, while the remaining 31,75% are equally distributed between the five cryptocurrencies. According to CoinShares, CGCI was the first digital currency index to comply with EU regulatory standards, while its average annual return on the investment vehicle is 18.78%.
The company says they developed the instrument that will allow investors to get exposure to the cryptocurrency market and at the same time improve the average investment return. CoinShares noted that the high volatility of digital assets is offset by the relatively stable precious metal since there is virtually no correlation between them.
CoinShares Chairman Daniel Masters believes CGCI will boost demand for digital assets among institutional investors.
Robustly researched and documented index products were the catalyst for the institutional adoption of commodities in the late ‘90’s through the advent of the Goldman Sachs Commodity Index. This crypto and gold index aims to do the same, by using academic research and its benchmark regulated status to pass muster with even the most stringent investment committees.
The team conducted academic research in partnership with Imperial College London. The study revealed that a pairing of gold and cryptoassets in a way that accounts for their risk contribution provides a risk-adjusted return profile that is more efficient to holding gold or cryptoassets alone.
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