‘THE WORLD HAS VOTED THAT THEY BELIEVE’... THIS ABOUT BITCOIN
The first quarter of the year saw many positives, alongside some obstacles in the crypto-space. More than anything, what the first quarter of 2021 witnessed was the continuing trend of Bitcoin’s institutional adoption. What markets were also subjected to was high volatility - Bitcoin’s price hit an ATH above $60,000 while ETH hiked above $4000.
At the moment, however, market-wide corrections are in play, with BTC trying to consolidate above the $38,000-level.
A couple of months ago, Goldman Sachs resumed its cryptocurrency desk after getting cold feet back in 2018 mainly due to the lack of regulations. Fast forward to 2021, it opened its trading desk for cryptocurrencies and began dealing with BTC Futures contracts. Furthermore, it offered BTC derivatives to its peers on Wall Street.
Ever wondered why did GS do that? Here’s one of the reasons...
In a recent report published by Goldman Sachs, the firm shared its analysis of Bitcoin. To begin with, the multinational bank shared a timeline of behavioral trends between 20132016 and 2017-2021. Alex Kruger provided the report’s screenshots on his Twitter feed.
The report itself fueled quite a few interesting reactions online, with the founder of asset management firm Aike Capital and active Crypto-Twitter commentator expressing his bullish narrative on his feed,
“If I read that report and were a nocoiner, I’d go look at the charts, recognize this as a great entry point, and go shopping. Granted, I’m not a dinosaur.”
Here’s an interesting take on Bitcoin’s activities over the said timeline. (Refer to Image).
Needless to say, various experts, including both proponents as well as skeptics, were quick to share their views on the latest report from Goldman Sachs.
Michael Novogratz, founder and CEO of crypto-investment firm Galaxy Digital Holdings, said,
“The mere fact that a critical mass of credible investors and institutions is now engaging with crypto assets has cemented their position as an official asset class.”
Supporting the same cause was Michael Sonnenshein, CEO of Grayscale, who reiterated,
“Institutional investors now generally appreciate that digital assets are here to stay, with investors increasingly attracted to the finite quality of assets like bitcoin—which is verifiably scarce—as a way to hedge against inflation and currency debasement, and to diversify their portfolios in the pursuit of higher risk-adjusted returns.” On the contrary, Nouriel Roubini, an Economics professor at NYU and popular crypto-skeptic, provided a contrasting viewpoint,
“I disagree with the idea that something with no income, utility, or relationship with economic fundamentals can be considered a store of value or an asset at all.”
Curiously, the same report also looked at the utility-based functions of cryptocurrencies, apart from Bitcoin.
What this suggests is that for many entities in the mainstream like GS, Bitcoin isn’t the only cryptocurrency to catch their eye.
The world’s largest cryptocurrency’s institutional adoption and the larger market’s bull run have both contributed to the scope and width of the latest report from Goldman Sachs.