Bloomberg just launched two new investment indices that combine Bitcoin and Gold (BBIG and BBUG), making them among the first multi-asset indices to combine digital assets with traditional commodities.
According to the Feb. 13 press announcement, Bloomberg just launched two composite Bitcoin and Gold investment indices. The BBIG is an equal-weighted Bitcoin and Gold index. The BBUG index also includes the U.S. Dollar for added protection. According to Bloomberg, customers can adjust and customize configuration weights of the indices.
The idea behind these new indices is to balance Bitcoin’s growth potential with Gold’s stability. “As a key investment hurdle in Bitcoin is elevated volatility, we see a fundamental case for using Bitcoin and Gold, not Bitcoin versus Gold,” explained Jigna Gibb, Head of Commodities & Crypto Index Products at Bloomberg Index Services Limited.
The development of these indices is timely, as both Bitcoin and Gold reached record highs in 2024, prompting more investors to view them as complementary assets in diversified portfolios. Moreover, although Bitcoin and Gold have historically had nearly zero correlation with each other, they have delivered positive long-term returns, making their composite index a potential positive diversifier for multi-asset portfolios.
BBIG and BBUG aren’t the first crypto indices by Bloomberg. The company also offers Bitcoin (BTC), Ethereum (ETH), Solana (SOL) indices as well as the Bloomberg Galaxy Crypto Index (BGCI), which tracks the performance of the largest and most liquid cryptocurrencies, and Bloomberg Galaxy DeFi Index (“DEFI”), designed to measure the performance of the largest decentralized finance protocols.
Bitcoin and Gold relationship
As Bloomberg noted in the press announcement, Bitcoin and Gold have historically had nearly zero correlation with each other. However, as crypto analyst Daink pointed out, Bitcoin tends to eventually follow gold’s movements after periods when they’ve been decoupled or moved in different directions. “Each time Gold displaces away from BTC, BTC plays catch up…,” he said in his recent post on X.
Essentially, if gold moves significantly in one direction, Bitcoin may follow suit later on, adjusting its price as if it’s “catching up” to gold’s momentum. So, while the correlation between Bitcoin and gold might fluctuate and often be near-zero (meaning no immediate relationship), it seems that Bitcoin aligns with gold’s movements after a time, showing a latent correlation that doesn’t appear in real-time.
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