Goldman Sachs Seeks to Impose Order on Expanding Crypto Universe with Classification System

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Author: Cane Bose

Goldman Sachs is trying to formalize how the financial sector discusses, monitors, and invests in the expanding universe of digital assets.

According to executives at the three companies, the investment bank will soon introduce a data service developed with global index provider, MSCI, and cryptocurrency data provider, Coin Metrics to categorize hundreds of digital coins and tokens so institutional investors can understand the new asset class.

Framework for Digital Assets

Anne Marie Darling, head of the client strategy for Goldman’s Marquee platform, said, “the digital asset ecosystem has expanded over the last couple of years.” Because our clients are increasingly required to consider performance tracking and risk management in digital assets, we are working to develop an easily understandable framework for the ecosystem of digital assets.

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Users can use the data stream when analyzing and researching, evaluating performance, maintaining portfolios, or developing investment products based on decentralized finance, metaverse, innovative contract platforms, or value transfer currencies. According to Tim Rice, CEO of Coin Metrics, large asset managers have requested an “adult framework” to help them understand digital assets and talk about them consistently.

Rice explains how it has been arranged “could assist asset managers come into this asset class in a much more uniform method.” “This is the next step in having the industry’s foundation in place so that everyone can accept it, and we can determine what the next directional move in the market is,” the author says.

Change in Сryptocurrency

Before plummeting along with other risky assets when the Federal Reserve raised interest rates, the value of cryptocurrencies soared during the pandemic, reaching $3 trillion last year.

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While critics like Warren Buffett of Berkshire Hathaway and Jamie Dimon of JPMorgan Chase have mocked bitcoin, industry supporters claim that the cryptocurrency’s current trend of reduced volatility compared to conventional assets demonstrates it is developing as an asset class.

New Datonomy Service

The unique platform, called Datonomy, can be accessed through either a subscription-based service or the company’s online marketplace, Marquee. Datonomy is a pun on the term taxonomy, the branch of science involved with identifying and categorizing the natural world.

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According to Darling, the various businesses that operate in the digital asset space have categorized the universe into different subsectors and classes.

This will allow asset management firms and hedge funds to understand the various facets of the digital asset space. For instance, it will allow them to discuss the potential implications of cryptocurrencies on the traditional stock market.

Conclusion

Goldman Sachs has come up with a way to classify assets with the help of its new Datonomy service. It will help in tracking assets and making decisions accordingly.

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