In the stock market, it is easy to track down subsectors across various indices, ETFs and benchmarks to help investors assess risks and prospects, such as in energy, staples or biotechnology.

With the broad world of digital currencies, this clear look at segments of the roughly $ 1 trillion ecosystem has been more difficult for institutional investors.

Goldman Sachs Group Inc. GS,
+ 4.51%,
MSCI and Coin Metrics have collaborated to form Datonomy, a new data service that offers a framework for classifying and tracking the performance of digital assets for building portfolios and other investment tools.

Goldman provides its technological backbone while MSCI contributes its indexing prowess. Coin Metrics provides market data from the world of cryptocurrencies.

“It’s easy enough to put things in a spreadsheet – the hard part is creating something you can use to actually provide a way to analyze the market,” Goldman executive Andrew Phillips told MarketWatch.

Volatility in the cryptocurrency market, including the instability of the past few days with the plight of cryptocurrency broker FTX, creates an additional need for performance monitoring and risk management in digital asset markets, the companies said.

“Many people, when they talk about digital assets, think of bitcoin BTCUSD,
and ethereum ETHE,
+ 9.60%,
Phillips said. “The interesting thing is that there is a fairly diverse ecosystem of people doing different things in the digital asset space.”

Datonomy divides the digital currency universe into four main classes: digital currencies, blockchain infrastructure, digital asset applications and on-chain derivatives.

Within each of these classes, it currently lists 14 sectors and 41 subsectors.

Within the digital currency class, for example, the two sectors are value transfer coins and specialized coins, and the subsectors within them include value transfer coins, meme coins, privacy coins, and remittance coins. .

Within digital asset applications, Datonomy’s offerings look at six industries, including decentralized finance, which has eight corresponding subsectors: decentralized exchanges, derivatives trading, decentralized lending, stablecoin issuers, forecasting markets, wealth management, crowdfunding and insurance.

The metaverse is listed as one of the other industries within digital asset applications. Subsectors in the metaverse include virtual worlds, games, and NFT ecosystems.

Phillips, who is global head of Goldman Sachs ‘core product strategy, said the Datonomy product will help Goldman Sachs’ bottom line by providing more services that institutional clients want.

“Our core business is helping our customers in the markets,” he said. “This is a new market and we are reflecting on how to deal with it”, adding: “We are thinking about how this evolves over time and what we can apply to it from a technological point of view”.

Coin Metrics CEO Tim Rice said Datonomy marks a “significant leap” for the industry by “establishing a consistent, future-proof framework for monitoring and analyzing the digital asset ecosystem,” according to a statement.

St├ęphane Mattatia, managing director of MSCI, said that “a consistent and standardized framework for the classification of digital assets is essential to support the ability of investors to evaluate the market”.

Leave a Reply

Your email address will not be published. Required fields are marked *