Bloomberg recently launched multiple asset indices to help investors diversify their traditional portfolios, a pioneering work that combines bitcoin and commodities.
Bloomberg – a global financial media, data, and technology company – introduced its Bitcoin & Gold Blend Indices which include the Bloomberg Bitcoin and Gold Equal-Weighted Index, and the Bloomberg Dollar, Bitcoin and Gold Equal-Weighted Index, aiming to help institutional and retail investors to expand their portfolios.
A Remarkable Year
In a press statement, Bloomberg disclosed that 2024 was a landmark year for cryptocurrencies, saying that favorable regulations and sentiment brought more than $220 billion in crypto investments.
“These assets were across 250+ ETFs, including those linked to spot Bitcoin and spot Ethereum which expanded access to crypto markets using a familiar wrapper,” Bloomberg added.
Bloomberg launches Gold and #BTC composite index. https://t.co/vppRXQc5FR
— Cryptocurrency (@cryptocurrency) February 14, 2025
According to the financial giant, gold and Bitcoin reached their peaks last year, which they believed further bonds the “relationship between digital and physical assets.”
As a result, many investors began to explore their competing and complementary attributes in diversified portfolios.
Blending Bitcoin And Gold
Bloomberg explained that Bitcoin & Gold Blend Indices are the first in this set of indices, saying they created this with a unit-based framework to allow modifications in the future and “customization of building blocks and weight based on client interest.”
According to the financial giant, the goal of the new indices is to capture Bitcoin’s growth and couple it with gold’s historic stability.
“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,” Bloomberg Index Services Limited Head of Commodities & Crypto Index Products Jigna Gibb said.
Bloomberg said that 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.
“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,” Gibb said.
Key Notes
– Gold making new ATHs forming HHs and HLs
– $BTC range bounding between 91k – 105kEach time Gold displaces away from BTC, BTC plays catch up as highlighted in black circles pic.twitter.com/IcrxJINCIf
— Daink (@TraderDaink) February 10, 2025
Bitcoin Follows Gold
Meanwhile, a crypto analyst disagrees that Bitcoin and gold have zero correlation.
Daink said in a post that Bitcoin is inclined to follow gold’s movements after periods when they have been decoupled or moved in different directions.
“Each time Gold displaces away from BTC, BTC plays catch up as highlighted in black circles,” Daink explained on the X platform.
Throughout the majority of Bitcoin’s existence, the correlation between Bitcoin and gold has been subject to fluctuations. Initially, the prices of these two assets fluctuated in a largely independent manner. This meant that when the price of one asset increased, the other did not necessarily follow suit.
Although there is no immediate relationship between Bitcoin and gold, the crypto tends to align its movement with that of the precious metal after a certain period.
Featured image from Gemini Imagen, chart from TradingView
