Bloomberg Unveils Bitcoin-Gold Indices for Diversified Portfolios

Bloomberg, a global financial media, data, and technology company, has recently introduced a pioneering move in the finance world by launching multiple asset indices that combine bitcoin and commodities. The company aims to help both institutional and retail investors diversify their traditional portfolios through these innovative indices.

In a press statement, Bloomberg disclosed that 2024 was a landmark year for cryptocurrencies, with favorable regulations and sentiment bringing more than $220 billion in crypto investments. These assets were spread across 250+ ETFs, including those linked to spot Bitcoin and spot Ethereum, expanding access to crypto markets using a familiar wrapper.

Bloomberg also noted that gold and Bitcoin reached their peaks last year, further bonding the relationship between digital and physical assets. As a result, many investors began to explore their competing and complementary attributes in diversified portfolios.

Bloomberg's latest move includes the introduction of the Bitcoin & Gold Blend Indices, which consist of the Bloomberg Bitcoin and Gold Equal-Weighted Index and the Bloomberg Dollar, Bitcoin and Gold Equal-Weighted Index. These indices are the first in this set, created with a unit-based framework to allow modifications in the future and customization of building blocks and weight based on client interest.

The goal of the new indices is to capture Bitcoin's growth and couple it with gold's historic stability. Bloomberg Index Services Limited Head of Commodities & Crypto Index Products Jigna Gibb stated, "We expect the Bloomberg Bitcoin and Gold basket to be the first of many commodities and digital asset blends as we see an increasing investor appetite for tailored indices that can target specific investment objectives and return profiles."

The Bloomberg Dollar, Bitcoin and Gold Equal-Weighted Index merges the US dollar's defensive attributes with Bitcoin and gold's potential, long-term uncorrelated characteristics. Historically, Bitcoin and gold have a nearly zero correlation with each other, noting that both have maintained positive long-term returns, making their basket an excellent diversifier for traditional multi-asset portfolios.

Gibb further explained, "With Bloomberg Indices' capabilities, we're able to continuously customize index offerings as the industry evolves. As a key investment hurdle in Bitcoin is elevated volatility, we see a fundamental case for using Bitcoin and Gold, not Bitcoin versus Gold."

Meanwhile, a crypto analyst disagrees