Goldman Sachs launched a digital asset classification system to provide institutional investors with a standardized way to view and analyze the crypto ecosystem, the bank announced Thursday.
Datonomy — a play on taxonomy, or the branch of science concerned with classification in the natural world — will help develop transparency into “how the market is moving” by classifying digital assets based on how investors use them and “can be licensed for a variety of use cases, such as the review and assessment of portfolio performance and reporting,” the bank said.
The bank worked with global index provider MSCI and crypto data firm Coin Metrics to develop the tool, which is available as a subscription through Goldman’s digital investment marketplace Marquee.
“The collaboration brings together MSCI’s expertise in critical decision support tools and services, Coin Metrics’ intelligence in the digital assets space, and Goldman Sachs’ innovative platforms paired with over 150 years of experience in financial markets to help solve this problem for clients,” Anne Marie Darling, head of marquee client strategy and distribution at Goldman Sachs, said in a statement. “Given our commitment to providing developer services, and as a trusted data analytics provider to our institutional clients, creating reliable data services for the emerging digital asset community is a strategic focus and natural extension to our existing business.”
Goldman has been slowly wading into the digital asset waters as the space has expanded in the last couple of years. The bank first launched a cryptocurrency trading desk in 2018, then halted it later that year after a Bitcoin price freefall of 80%. Despite blasting digital tokens like Bitcoin over their “volatility” in 2020, Goldman relaunched its cryptocurrency trading desk in March 2021.
Earlier this year, the bank partnered with crypto firm Galaxy Digital to execute the trade of a Bitcoin non-deliverable option, a derivative linked to the price of Bitcoin that is settled in cash at maturity. This was the first transaction of its kind done by a Wall Street bank.
The bank said in its Tuesday announcement that as the digital asset class matures amid market volatility, there’s a weighted need for performance tracking and risk management. Datonomy is designed to help market participants navigate the digital waters as they seek help “organizing these assets into categories to better define their risk profile and understand their returns.”
Tim Rice, CEO of Coin Metrics, said that this “represents a significant leap forward for the [crypto] industry as a whole, establishing a coherent and future-proof structure to monitor and analyze the digital assets ecosystem.”