Goldman Sachs Ranks Bitcoin as Top Performing Asset

The world’s leading cryptocurrency, Bitcoin has been rated by Goldman Sachs as the best-performing investment asset above industries and traditional investment assets such as technology and gold. According to recent data from the American banking giant, performance was measured using absolute and risk-adjusted returns.

Based on the analysis, Bitcoin gained an outstanding 51% in terms of total returns Year-to-Date (YTD). Information Technology came second on the chart with over 16%, while communication services came third with over 15%.

Similarly, Bitcoin ranked first in terms of risk-adjusted return measured in the Sharpe Ratio. From the data, Bitcoin also demonstrated top performance with a score of 1.9. The value is slightly higher than Information Technology with a score of 1.5. Next on the chart is Nasdaq with a value of 1.4 followed by communication services with 1.2.

Surprisingly, the energy and crude oil sectors have declined by 11% and 14%, respectively. The decline can be attributed to weaker fundamentals and broader market concerns.

Reasons for Bitcoin’s Stellar Performance

Bitcoin has outperformed other investment assets in recent times for a variety of reasons. Chief among these reasons is the increased chance that the US Federal Reserve would eventually abandon its aggressive monetary policy. 

Interestingly, the CEO of Galaxy Digital, Mike Novogratz recently highlighted in an interview that the recent regulatory change by the US government might result in a high adoption rate of the token.

Additionally, the recent financial crisis in the US which led to the fallout of  3 major banks (Silicon Valley Bank, Silvergate, and Signature bank) may have also contributed to the high adoption rate of Bitcoin. This is because people may have lost faith in the established banking system and therefore, are seeking different ways to store and move their cash.

Finally, Bitcoin has benefited from speculation and hype. As more people have become interested in Bitcoin and its potential as an investment, the value of Bitcoin has increased. This has created a self-fulfilling prophecy where the increasing value of Bitcoin has attracted more investors, which in turn has driven up the value of Bitcoin even further.