CoinShares, a London-based asset manager, is launching a crypto gold index token for institutional investors.
London-based CoinShares is known for its exchange-traded bitcoin product, XBT. Golden Profit has already published the CGI token on the Ethereum blockchain. The CGI token (Crypto-Gold-Index-Token) is an index token for crypto and gold assets.
According to a published document , the CGI token was developed in collaboration with Imperial College London and Index Coop. Index Coop is the team behind the DeFi Pulse Index
The CGI token consists of two equally weighted crypto assets (WBTC, WETH) and one gold asset (WDGLD). That means 25 percent WBTC, WETH and 50 percent WDGLD. WBTC (Wrapped Bitcoin) is a bitcoin tokenized in ERC-20 format. The same applies to WETH (Wrapped Ether) and WDGLD (Wrapped Gold). CoinShares gold token was already used in the CGCI index token . This was first published in May 2020.
The CGI token follows the release of the DeFi Pulse Index (DPI) and the DeFi Index Fund from Bitwise Asset Management .
CoinShares opens the gates to a new asset class
„Indices bring legitimacy and easy access to novel asset classes,“ said CoinShares CEO Danny Masters in an interview.
The Goldman Sachs Commodity Index opened the gates to the commodity market for institutional investors in the mid-2000s – a previously unestablished asset class.
“When [institutional investors] got into the resource space, they wanted an index. History will likely repeat itself with digital assets, ”added CoinShares CEO.
The CGI token benefits from the volatility of the crypto market. CoinShares is based on the Shannon-Demmon portfolio methodology .
The portfolio rebalances the original weights on a set schedule. This happens regardless of ascension or descent. The methodology has proven to be advantageous over passive investment products and traditional indices.