New Delhi: Global investment bank Goldman Sachs reportedly ranked Bitcoin the best-performing asset year-to-date (YTD). Additionally, as the asset with the highest risk-adjusted return above real estate, gold, the Nasdaq 100 and the S&P 500 cryptocurrency tops the global investment bank’s list.
Goldman Sachs tweeted about a market performance chart which shows the top 25 markets’ total returns and their year-to-date risk-adjusted returns.
Cryptocurrency Bitcoin is at the top with a total return list of 27%, followed by the MSCI Emerging Markets Index at 8%. With that, BTC is also at the top in the risk-adjusted return list of Goldman Sachs’, with a Sharpe Ratio of 3.1. Since the firm published its chart, the price of bitcoin has risen.
Many people have compared bitcoin to gold as a store of value and a hedge against inflation, which ranked several places below BTC on both the total and the risk-adjusted return lists. Metal has a total return of 6% YTD with a Sharpe Ratio of 2, as per Goldman’s chart. A higher Sharpe Ratio indicates that investment has yielded higher returns for a given level of risk.
However, in December last year, Goldman Sachs said gold is a better “portfolio diversifier” than bitcoin since tighter financial conditions probably less influence it. Additionally, the bank’s analysts believe that gold has developed non-speculative use cases while bitcoin is still looking for one.
For several years, Goldman Sachs has been in the crypto space. In May 2021, the firm formally established a cryptocurrency trading desk. Last Year in January, the investment bank predicted that as the crypto continues to take gold’s market share, BTC could reach $100,000. Last year, Goldman Sachs executed its first OTC crypto transaction, provided its first bitcoin-backed loan, and launched a data service to assist investors in analysing crypto markets.
