A partnership between Galaxy Digital and Bloomberg has birthed a fourth joint index, but it focuses on the decentralized finance (DeFi) this time. Galaxy, owned by Mike Novogratz, has also created a DeFi Index fund for the firm, which will monitor the performance of the Bloomberg Galaxy DeFi with DeFi as the ticker.
A Partner and the Global Head of Asset Management at Galaxy Digital, Steve Kurz, said, “it came from the clients’ inquiries. Why not then?”
DeFi is, in numerous ways, one of the major revolutionary advancements from the crypto space, and it has become quite easy for institutions to comprehend compared to bitcoin and Ethereum because of its established model. There is borrowing and lending, synthetics, derivatives, and swaps.
This new index will monitor about nine tokens, including Sushi, Compound, Uniswap, and Aave. “The tokens available for tracing are selected on the ground of pricing quality, market capitalization, and liquidity.” Mentioned Kurz
The launch of the new DeFi fund and Index by Galaxy came right amid the uncertainty of crypto regulation. The chairman of the United States Securities and Exchange Commission, Gary Gensler, clarified that projects in the decentralized finance space are not immune from regulatory actions, as reported on Thursday by Wall Street Journal.
However, Kurz affirmed that attention from law and policymakers would bring legitimacy and validation to the asset class.
He said, “The Crypto piece from the Senate Bill is quite positive, and for me, Washington had the important people deliberating issues around this asset class for the first time. We feel that there are certainly some groups that are worried about the invasion of DeFi, and among them are banks.”
“Banks has huge power in the capital,” He continued, “So this is not an issue that can be resolved in months or even a year, but I think it will be taken seriously now.”
Speaking again, the Galaxy Partner said, “Exposing investors to an index fund is a good way of enabling them to diversify their portfolios into the decentralized finance yet avoiding the risks that come with holding one token.”
“One of the reasons you have diversification and own an index fund is that you are placing a bet on the space. In this case, you are betting on the Decentralized Finance Space against one asset. Some of the components of DeFi may be available tomorrow while others will not.” Kurz said.
The Bloomberg Galaxy DeFi index is the fourth index of Galaxy with Bloomberg. The firm teamed up with Bloomberg in 2018 to launch the Bloomberg Crypto Index that is used to track the performance of BTC and ETH.