MSCI Enlists Goldman Sachs To Organize Crypto Market Chaos

MSCI is bringing to market four digital asset indexes and has partnered with Goldman Sachs and Coin Metrics to create a classification system for the nascent space.

The New York-based company is set to offer two indexes that seek to capture the performance of the top 20 or top 30 digital assets by market capitalization, respectively, excluding stablecoins.

It also revealed the launch of a digital assets index excluding tokens that rely on a proof-of-work consensus mechanism, such as bitcoin.

The Ethereum blockchain transitioned from proof-of-work to proof-of-stake in September. Industry watchers told Blockworks that the staking yields investors can now earn from ether is poised to attract institutions.

A fourth index targets digital assets associated with smart contracts platforms.

“The digital assets ecosystem is evolving rapidly along with investor demand for tools and solutions to help navigate this new asset class,” Stephane Mattatia, MSCI’s head of thematic indexes, said in a statement.

“Global investors are looking for greater transparency and insight into these markets and how best to participate in them in a manner that meets their high standards for professionalism, scale, risk management, and security.”

Banks pay more attention to crypto as institutional interest rises

The launches come the same day that MSCI revealed datonomy, a data service it created with Goldman Sachs and Coin Metrics that classifies coins and tokens based on how they are used.

MSCI is the owner and sole administrator of this new classification system. Goldman Sachs and Coin Metrics are the initial datonomy advisory board members, while other members will be revealed later on, according to MSCI.

The classification system breaks the digital assets into categories, such as value transfer coins and specialized coins — the latter consisting of meme coins, privacy coins and remittance coins. It also includes sub-categories within larger segments including blockchain infrastructure, digital asset applications and on-chain derivatives.

Anne Marie Darling, head of Marquee client strategy and distribution at Goldman Sachs, said in a statement that the collaboration brings together MSCI’s support tools, Coin Metrics’ crypto expertise and Goldman Sachs’ traditional finance experience.

Banks are getting more involved in crypto and blockchain in recent months, despite the continued crypto drawdown and broader bear market.

Goldman Sachs facilitated its first over-the-counter (OTC) crypto transaction with Galaxy Digital in the form of a bitcoin non-deliverable option, the bank revealed in March.

BNY Mellon launched a crypto custody platform in the US for certain institutional clients to hold and transfer bitcoin and ether.

JPMorgan this week used the Polygon blockchain to trade tokenized cash deposits.This shift comes as a survey by Fidelity Digital Assets found that 58% of surveyed institutional investors reported owning digital assets in the first half of 2022 — a 6% year-over-year increase. Of the more than 1,000 respondents, 74% said they plan on buying digital assets in the future.

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