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Bloomberg and Galaxy Digital launch DeFi Index

Fri 20 Aug 2021 ▪ 15h15 ▪ 4 min read — by Greg Hansen

It has been discussed that financial and media giant Bloomberg and Galaxy Digital are considering expanding their cryptocurrency offerings for the world. On Thursday, Bloomberg, along with Galaxy Digital announced the expansion of its crypto offering with the launch of the Bloomberg Galaxy DeFi Index (DEFI) and Galaxy DeFi Index Fund. The cryptocurrency index will track nine DeFi project tokens.

The composition of the index

According to the announcement, the crypto index would measure the performance of large decentralised finance (DeFi) protocols by market value. The tokens included in the DeFi index are selected based on institutional trading volumes, custodial opportunities in the US, and prices. As of 1st August 2021, the index includes Uniswap (UNI), Aave (AAVE), Maker (MKR), Compound (COMP), Yearn.Finance (YFI), Synthetix (SNX), SushiSwap (SUSHI), 0x (ZRX), and UMA (UMA). Each token will represent no less than 1% and no more than 40% of the overall volume of the index. Every month, the composition of the index will change as new DeFi tokens are added and obsolete tokens are removed.

DeFi and the future of financial services

The recently published report estimates that decentralised finance will grow by 385% by the end of 2021 to become an $80 billion (~£59 billion) industry. The industry could cross the $800 billion (~£588 billion) mark by next year if it keeps growing at this rate.

“Decentralized finance is growing as the next major investment theme within crypto,” stated Head of Product Management for Bloomberg’s Multi-Asset Index business, Alan Campbell. “As liquidity and institutional custody solutions continue to grow, DeFi has become an increasingly compelling option for institutional investors, and we’ll continue working with Galaxy to expand our crypto index offering.”

Galaxy Digital is a digital asset management company founded by Michael Novogratz in 2018 after quitting Goldman Sachs. In fact, Galaxy Digital is a leading service provider for organisations that are just getting acquainted with the innovations occurring in the cryptocurrency space. Steve Kurtz, partner and head of asset management at Galaxy Digital, is rather optimistic about his company’s partnership with Bloomberg. He said, “Galaxy continues to pioneer inroads for institutions seeking exposure to the innovation happening within the crypto ecosystem. The blockchain-based infrastructure behind DeFi is maturing at an accelerated rate and clear examples of how this new technology can disrupt financial services are emerging in real-time. This partnership with Bloomberg and our DeFi Index Fund provides investors with data and tools that deliver calculated exposure to the future of financial services.”

In 2018, Bloomberg and Galaxy Digital collaborated to launch the Bloomberg Crypto Index, which contained such coins as Bitcoin (BTC) and Ethereum (ETH). This index was launched after Bitwise introduced its DeFi crypto index in February of the same year. The concerted efforts of these companies will promote cryptocurrencies, first among financial market participants and then for the public.

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Greg Hansen avatar
Greg Hansen

Belgium native who has a passion for writing. Since 2015 I have understood that the blockchain will radically change our lives, and I absolutely want to share my findings with you!

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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