Bloomberg introduces new blend of Gold and Bitcoin indices – Full FX

Bloomberg has recently introduced the Bloomberg Bitcoin & Gold Blend Indices, marking the debut of some of the earliest multi-asset indices combining commodities with digital assets. These new indices, the Bloomberg Bitcoin and Gold Equal-Weighted Index (BBIG) and the Bloomberg Dollar, Bitcoin, and Gold Equal-Weighted Index (BBUG), have come about after a notable year for cryptocurrencies in 2024, during which over $220 billion in crypto investments were registered, spread across 250+ ETFs.

The surge in both gold and bitcoin values in the past year has strengthened the bond between digital and physical assets. This upsurge has prompted investors to delve into the distinctive and complementary features of these assets within diversified portfolios. The launch of the new indices signifies the beginning of a range of indices, developed with a unit-based framework that allows future customization based on client interest. These indices aim at capturing bitcoin’s growth potential in tandem with the historical stability of gold.

The BBUG Index combines the defensive characteristics of the dollar with the potential long-term uncorrelated features of bitcoin and gold. Historically, bitcoin and gold have exhibited nearly zero correlation with each other but have maintained positive long-term returns, positioning their basket as a potential diversifier for traditional multi-asset portfolios. The head of commodities & crypto index products at Bloomberg Index Services Limited, Jigna Gibb, anticipates the Bloomberg Bitcoin and Gold basket to be the pioneer of many commodities and digital asset blends, driven by the increasing investor appetite for tailored indices that cater to specific investment objectives and return profiles.

The continuous evolution of the industry prompts Bloomberg Indices to continuously customize index offerings to meet evolving needs. Given the elevated volatility associated with bitcoin as a key investment hurdle, employing a mix of bitcoin and gold, rather than pitting one against the other, presents itself as a solid approach. The new Bloomberg Bitcoin & Gold Blend Indices open up the possibilities of enhancing investment strategies and fostering diversity within portfolios.