Digital asset manager, CoinShares Group launched CoinShares Gold and Cryptoassets Index (CGCI) on Bloomberg Terminals and Refinitiv. The first EU Benchmark Regulations (EU BMR) compliant index for digital assets and gold aims to provide exposure for cryptoassets, improve average returns and cut down volatility.
The CGCI index has moderate operating costs and provides risk-managed exposure to cryptoassets. The index’ construction leverages the high volatility of cryptoassets, the low volatility of gold, and the lack of correlation between the two.
CoinShares’ new index gives investors more effective risk control compared to other cryptoasset indices that offer broad exposure to crypto assets through market capitalization weighting, but limited risk diversification because of the high correlation among cryptoassets and their volatility.
Daniel Masters, Executive Chairman of CoinShares commented:
Robustly researched and documented index products were the catalyst for 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.
Academic research in partnership with Imperial College London discovered that the pairing of gold and cryptoassets in such way that accounts for their risk contribution brings a risk-adjusted return profile that is actually better than holding gold or cryptoassets alone.
Professor Will Knottenbelt, Director of the Imperial College Centre for Cryptocurrency Research and Engineering, said:
The CGCI is the product of nearly 2 years of research, development and experimentation conducted by Imperial in close collaboration with CoinShares.
Michael Petch, Chair of the Index Committee, also commented:
The design of the CGCI utilises the concept of volatility harvesting. We are excited to introduce an index that provides investors with portfolio diversification in the form of cryptoassets while minimizing risk using gold.
CoinShares has worked closely with Compass Financial Technologies, registered Benchmark Administrator, in the development of an index that is compliant with the EU Benchmark Regulations (EU BMR). The company also collaborated with market data providers Kaiko and Messari in the creation of the novel index.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
