Goldman highlights Bitcoin as best performing asset
Bitcoin has emerged as the best investment asset in year-to-date returns and risk-adjusted performance, outperforming traditional sectors such as technology and gold
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Bitcoin has outperformed traditional investment assets and sectors, such as technology and gold, in year-to-date (YTD) absolute returns and risk-adjusted performance, according to recent data from Goldman Sachs.
The leading cryptocurrency has achieved 51% in YTD absolute returns, outperforming Information Technology (+16%), Communications Services (+15%), Consumer Discretionary (+11%), Russell 1000 Growth (+10%), Gold (+4) %) , and the S&P 500 (+4%).
Meanwhile, energy and crude oil have seen a decline of 11% and 14% respectively. Oil prices have fallen to their lowest level since December 2021 on softer fundamentals and broader market concerns. The market floor will depend on OPEC+ and the US.
In terms of risk-adjusted return, as measured by the Sharpe Ratio, the clock coin has also shown strong performance with a score of 1.9. This is higher than information technology (1.5), Nasdaq (1.4) and healthcare (-1.1).
Bitcoin’s recent price rise has been attributed to the increasing likelihood that the US Federal Reserve will eventually drop its hawkish monetary policy.
The cryptocurrency is up 35% since March 10, which is when regulators shut down Silicon Valley Bank.
Despite warnings from market analysts about a possible correction, Bitcoin’s rebound has been stronger than Wall Street stocks and has caught investors’ attention.
The implosion of Terra, FTX and Celsis 3AC as well as global monetary tightening damaged investor confidence in cryptocurrencies in 2022, with Bitcoin experiencing a massive correction.
However, Bitcoin ended the week with a gain of 34, its best since January 2021, amid the ongoing banking crisis, indicating a narrative shift in the perception of the largest cryptocurrency.
The crypto rally during the ongoing banking crisis has been welcomed by desperate cryptocurrency investors after a brutal bear market, with some of them suggesting that it is a change in the way Bitcoin is perceived. Nevertheless, the value of Bitcoin is still heavily influenced by changes in inflation rates and decisions made by the Federal Reserve regarding interest rates.