Crypto enthusiasts like to refer to bitcoin as digital gold, and Goldman Sachs seems to agree.
A new report from the Wall Street behemoth shows that bitcoin outperformed all other asset classes over the past year, giving investors a 60% return. The next top performer was crude oil at 55%. The S&P 500, often compared with bitcoin, saw a 29% increase, while the top five was completed by Russell 1000 Growth and Nasdaq, both at 28%.
Gold, a classic safe haven for risk-averse investors, rose only four percent over the period, implying a market share steal by the high-riding cryptocurrency.
In a research note, Goldman Sachs’ co-head of foreign exchange strategy Zach Pandl, suggests bitcoin currently holds a 20% share of the gold/bitcoin store of value market.
“Hypothetically, if bitcoin’s share of the ‘store of value’ market were to rise to 50% over the next five years (with no growth in overall demand for stores of value) its price would increase to just over $100,000, for a compound annualised return of 17-18% (accounting for growth in bitcoin supply over time),” he writes.
Growth over the next year will provide an acid test for bitcoin. But with new technology providers making it easier to invest and more financial institutions piling into the market as regulatory measures take effect, any near-term cooling of the cryptomania currently gripping the markets appears unlikely.