According to Goldman Sachs, Bitcoin has emerged as the clear winner of the year. The cryptocurrency outshined all other assets and secured the top spot on the investment bank’s list of highest risk-adjusted returns. Beating out competition from traditional favorites such as gold, real estate, and major stock indices such as the S&P 500 and Nasdaq 100.
Global investment bank Goldman Sachs has reportedly ranked bitcoin the best-performing asset year-to-date (YTD). The Twitter account Documenting Bitcoin tweeted earlier this week: “Bitcoin is the best-performing asset in the world this year, according to the latest data by Goldman Sachs.”
The tweet includes a market performance chart by Goldman Sachs showing the top 25 markets’ total returns as well as their year-to-date risk-adjusted returns.
Leading the pack in total returns, Bitcoin has delivered an impressive 27% gain, leaving other assets far behind. The MSCI Emerging Markets Index comes in a distant second at 8%. The cryptocurrency also reigns supreme when it comes to risk-adjusted returns, with a Sharpe Ratio of 3.1, as per Goldman Sachs. Since the firm’s chart was published, the price of Bitcoin has continued to soar and is currently trading at $23,130, representing a tremendous increase of 39% year-to-date.
Despite being frequently compared to Bitcoin as a safe-haven asset and inflation hedge, gold falls significantly behind the cryptocurrency in terms of returns, both on the total and risk-adjusted lists. According to Goldman’s chart, gold has generated a total return of only 6% so far this year and a Sharpe Ratio of 2. It’s worth noting that a higher Sharpe Ratio indicates that the investment has delivered greater returns relative to the level of risk.
However, Goldman Sachs said in December last year that gold is a better “portfolio diversifier” than BTC since it is likely to be less influenced by tighter financial conditions. Furthermore, the bank’s analysts believe that gold has developed non-speculative use cases while bitcoin is still looking for one.
Goldman Sachs has been actively involved in the crypto industry for several years, and in May 2021, the firm officially established a cryptocurrency trading desk. The investment bank has been bullish on the crypto market, with predictions of BTC reaching $100,000 as it continues to capture market share from gold.
In 2020, Goldman Sachs made significant strides in the crypto space, conducting its first over-the-counter crypto transaction, offering its first bitcoin-backed loan, and launching a data service to assist investors in analyzing crypto markets.
Johnson Philip is a passionate cryptocurrency enthusiast and writer for CoinSEM.com. He has been following the crypto industry for years, and has a deep understanding of the various technologies and trends driving the market. Johnson has written extensively on topics ranging from blockchain development to ICO analysis and is known for his ability to translate complex technical concepts into easy-to-understand language.
Leave a Comment