Wall Street titan Goldman
The Breakdown You Need To Know:
With the price of gold currently around $1,800 per ounce, Bitcoin has the potential to cross the $100,000 milestone in the coming years, according Goldman Sachs analyst Zach Pandl. He wrote that within a few years if its share of the store of value market were to “hypothetically” reach 50% the cryptocurrency could reach this six-figure milestone.
“Bitcoin may have applications beyond simply a “store of value” – and digital asset markets are much bigger than Bitcoin – but we think that comparing its market capitalization to gold can help put parameters on plausible outcomes for Bitcoin returns,” Pandl wrote according to Reuters.
CultureBanx noted that as institutional investors like Goldman Sachs engage in these derivatives, they’ll be looking to ease their cautiousness by having a reliable benchmark for their performance. Using a commodity like gold is perhaps a good place to start as the financial firm pointed out that Bitcoin has a $700 billion market cap, compared to gold’s nearly $2.6 trillion owned as an investment.
Goldman Sachs has already allowed their wealth management clients to invest in Bitcoin and other digital assets. Its private wealth management division is catered towards the wealthiest of clients, those with a minimum of $25 million to invest and they wanted in on the Bitcoin action. While Goldman Sachs dips its toes in the cryptocurrency markets, Morgan Stanley
Bitcoin’s value has increased more than 17% over the last 12 months and Goldman restarted its cryptocurrency trading desk in 2021. Initially, they did not actually trade Bitcoin, instead the bank used its own money to trade Bitcoin futures contracts for clients. Part of the reason the firm decided to go this route is due to several inquiries received from hedge funds, foundations and endowments which had received donations from Bitcoin millionaires.