Goldman Sachs Report Labels Bitcoin as an Investable Asset – Can It Spur Confidence?

A Goldman Sachs Macro Research called “Crypto: A new asset class?” was published on May 21st, 2021, revealing several important insights into how the popular investment bank views cryptocurrencies and Bitcoin, in particular.

Although the paper reiterates all the widely-known risks, including extreme price volatility, regulatory crackdowns, and heightened tax scrutiny, it is also describing Bitcoin as an “investable asset”.

This comes after a period during which numerous companies, like Square or Tesla, announced stakes in Bitcoin, showing an increasing number of institutional players view the largest cryptocurrency in the world the same as other traditional asset classes.

Even though the Goldman Sachs report is balanced, highlighting both pros and cons related to cryptocurrencies, it marks a shift into how the bank relates to Bitcoin. One of the main reasons has to do with how other asset managers and macro funds are now interested in crypto as a part of their portfolio:

“But beyond that, asset managers and macro funds are interested in whether or not crypto fits into their portfolios, and if it does, how to get access to either the physical—by trading the spot instrument on a blockchain— or exposure through other types of products, typically futures. Hedge funds, perhaps unsurprisingly, are more active in this space, and are particularly interested in profiting from the structural liquidity play inherent in the market…”

Institutional investments – a major tailwind for Bitcoin?

The 2020-2021 Bitcoin bullish trend was different from the one witnessed in 2017, not just price-wise, but also by the institutional involvement in the industry. Ultra-low interest rates and massive fiscal spending boosted risk sentiment across the financial markets, making cryptocurrencies like Bitcoin top gainers.

Institutional money pouring into the crypto industry had been expected since a few years ago and now that it has materialized, Bitcoin gains are unprecedented.

Retail sector’s contribution to weight as well?

Major developments occurred on the retail side, as well, where the appearance of cryptocurrency trading platforms such as CF Global Trader, enabled individuals from all around the world to take advantage of Bitcoin and altcoins via derivatives.

Advanced trading software, professional support 24/6, tight trading costs, and trading education are just some of the benefits associated with CF Global Trader, provided to ensure both beginners and experienced traders can get involved in the market properly equipped.

Elevated price uncertainty makes it imperative for people to have the ability to sell-short when prices are falling, a feature that generates opportunities even when the market sentiment is not edging up.

Conclusion

The media attention focused on the Goldman Sachs crypto report as it comes from one of the leading investment banks in the USA. This is showing cryptocurrencies are no longer unknown assets and even large institutional players are taking a closer look.

A similar path can be noticed in the retail cryptocurrency trading sector, where the appearance of platforms like CF Global Trader brings crypto closer to the average Joe on the street. Ultimately, all of these contribute to new flows venturing into cryptocurrencies, something that can have a positive effect in the long run.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes