Goldman Sachs Says Bitcoin Is Officially a New Asset Class

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It looks like Bitcoin is getting endorsed by more and more important figures, this time getting the support of Goldman Sachs’ Global Head of Digital Assets.

Mathew McDermott said in a new piece of research that it was time for Bitcoin to be taken more seriously as a new asset class, an investable asset. Sure, it had its own risk, partly because it was going through an adoption phase and was still relatively new, but people were largely treating it as a new asset class, which was notable.

Bitcoin Gets Goldman Sachs’ Approval

Goldman Sachs’ Global Head of Digital Assets explained that while Bitcoin did not behave as people would intuitively expect, relative to other assets giving the analogy to digital gold, it still tended to be more aligned with risk-on assets. Nevertheless, it was now considered as an investable asset, given the fact clients were treating it as a new asset class, and it was not that often that we got to witness the emergence of a new asset class.

However, McDermott admitted that the regulation of crypto was still a big risk to further price appreciation. He acknowledged that the inconsistent regulatory actions all across the world impeded the further development of crypto or the ability of more regulated entities to engage with it. Even though the regulations were more constructive, though, McDermott said he certainly won’t be complacent.

And even though there was such a risk, Goldman Sachs’ McDermott said that, still, clients remained keen on adding some form of crypto to their portfolios. He explained that, as oppose to asking questions around what Bitcoin or cryptocurrencies in general were, clients were asking about how they could learn more on the matter and get access to the crypto space, so the scene was greatly changing. Asset managers, as well as macro funds, were getting interested in whether crypto fitted into their portfolios and if yes, how to get access to either exposure through other types of products or the physical access, by trading on a blockchain.

What about the Regulatory Concerns?

We know that Bitcoin gaming is always on the rise and more and more players are interested in using it for fast and easy transactions. However, regulatory concerns are not only impeding it to stay on the online gambling scene but across other industries as well.

Its price continued to be under massive pressure this Sunday, and at $32,652, compared to its mid-April peak of $64,829, it has crashed around 50%. But even though on Monday, it recovered slightly, the serious price fluctuation came amid negative comments from government officials all across the globe.

Jerome Powell, Federal Reserve Chairman said that the governing body would continue fighting for the digital dollar, restoring faith and confidence in the banks, payment networks and other service providers that allowed money transfers. Authorities in China said it would be necessary to crack down on the mining and trading of Bitcoin to limit investment risks.

Nevertheless, McDermott’s embracement will certainly make a way for new opportunities for the legalization of emerging markets.

May 26, 2021: • No Comments

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