CoinShares launches DeFi index token for institutional investors

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. CoinShares has already released the CGI token on the Ethereum blockchain. The CGI token (crypto gold index token) is a Bitcoin Storm 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 is, 25 per cent each WBTC, WETH and 50 per cent WDGLD. WBTC (Wrapped Bitcoin) is a bitcoin tokenised in ERC-20 format. The same applies to WETH (Wrapped Ether) and WDGLD (Wrapped Gold). CoinShare’s gold token was already used in the index token CGCI. This was first released in May 2020.

The CGI token follows the release of Bitwise Asset Management’s DeFi Pulse Index (DPI) and DeFi Index Fund.

CoinShares opens the gates to a new asset class

„Indices bring legitimacy and easy access to new types of asset classes,“ CoinShares CEO Danny Masters said in an interview.

The Goldman Sachs Commodity Index opened the doors to the commodities market for institutional investors in the mid-2000s – a previously unestablished asset class.

„When [institutional investors] came into the commodity space, they wanted an index. History is likely to repeat itself with digital assets,“ adds CoinShares CEO.

The CGI token benefits from the volatility of the crypto market. CoinShares is guided by the Shannon Demmon portfolio methodology.

The portfolio rebalances the original weightings according to a set schedule. This happens regardless of ups or downs. The methodology has proven to be advantageous over passive investment products and traditional indices.