- Goldman Sachs ranks Bitcoin the best-performing asset of 2023 against other assets such as gold, crude oil, and real estate.
- Bitcoin held 27% in total returns and a 3:1 risk-adjusted ratio.
- The market is recovering from the 2022 crisis with Bitcoin having gone up by over 37% since the year began.
Bitcoin has been ranked the best-performing asset of 2023 based on the year-to-date return report released by Goldman Sachs. The report evaluated the attributes of Bitcoin and graded it the best against the likes of gold, the S&P 500, Nasdaq 100, and real estate.
The report places Bitcoin higher than other assets, including energy, healthcare, information technology, energy, 10-year U.S. Treasury, healthcare, utilities, materials, crude oil, consumer staples, and MSCI.
Based on the Goldman Sachs report, as shown by this screenshot, Bitcoin ranked first after generating 27% in total returns, surpassing the other assets by a landslide with the second-best help, MSCI, achieving an 8% total return. Additionally, Bitcoin attained a risk-adjusted ratio of 3:1, thus still ranked first.
This win comes after a disastrous year that the crypto industry had in 2022, where it suffered significant setbacks ranging from multiple bankruptcies and collapses to fraud investigations. This crisis triggered by the collapse of Voyager, Celsius, Three Arrows Capital, Terra, and FTX fueled the dive that Bitcoin and other cryptocurrencies in the market suffered.
During this crypto winter, Bitcoin suffered a significant hit, losing more than 75% of its value from its November 2021 peak. As a result, the Federal Reserve increased interest rates tremendously to manage inflation as investors turned their backs on cryptocurrencies and other high-risk investments.
However, since the beginning of 2023, things are beginning to look up. Bitcoin has gone up by 37% in the last month. The market has also steadily been making recoveries raising total market capitalization holding levels past $1 trillion.
Goldman Sachs’ history with Bitcoin
Goldman Sachs has not always been a fan of Bitcoin. It has been a very vocal critic of Bitcoin and cryptocurrencies. In May 2020, Goldman Sachs, on a set of presentation slides for a conference call, listed reasons why they believed ‘Cryptocurrencies, Including Bitcoin, Are Not an Asset Class.’
They stated it does not generate cash flow like bonds, it does not generate earnings through exposure to global economic growth, and neither does it dampen volatility given historical volatility, among other reasons.
They also added:
“We also believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”
They raised concerns that cryptocurrencies had aided illicit activities such as Ponzi schemes, money laundering, ransomware, and darknet markets.
However, their perspective has gradually changed, and at the start of 2021, Goldman Sachs included Bitcoin in its returns report. Including the asset in this report aided in bringing Bitcoin into mainstream finance since earlier years were marked by distrust and skepticism.
Goldman Sachs has also been receptive to Bitcoin offers, with the Wall Street giant launching crypto services to its high-net-worth clients in the second quarter of 2022 in response to rising demand.
