Bitcoin is Maturing as an Asset, Says Goldman Sachs Exec
Bitcoin is maturing as an asset and is now attracting more institutional interest, according to Goldman Sachs global head of commodities research Jeffrey R. Currie.
With volatility decreasing and the fantastic rise in BTC price, the investment bank has joined others in steadily changing their narrative on Bitcoin.
Speaking on CNBC, Currie said Bitcoin was maturing as an asset and the volatility it had experienced was common for nascent assets.
‘I think the market is beginning to become more mature,’ Currie said of Bitcoin, adding that ‘in any nascent market you get that volatility and those risks that are associated with it.’
Bitcoin’s remarkable run has attracted a lot of interest, and the institutions are certainly gaining exposure to Bitcoin.
However, the investment bank’s head of commodities research said it was ‘still a tiny fraction of the overall market cap,’ and that much more is needed to help stabilize the Bitcoin price, which will ultimately attract larger volumes.
‘The key to creating some type of stability in the market is to see an increase in the participation of institutional investors and right now they’re small… roughly one per cent of it is institutional money’ said Currie.
Goldman Is Changing Its Tune Along With Many Other Institutions
Goldman Sachs is the latest legacy financial institution to publicly back Bitcoin, a rarity back in 2017.
The investment bank has even begun hiring more Bitcoin and digital currency experts for its human resources team, and recently issued guidance on the peaceful coexistence of Bitcoin and gold as macro hedges.
This follows the news of Morgan Stanley making a huge investment in MicroStrategy, a company with more Bitcoin than dollars on its balance sheet.
Added with some of Wall Street’s most legendary names Paul Tudor Jones, Stan Druckenmiller and Bill Miller all publicly backing Bitcoin, and its clear the Bitcoin narrative is changing and the institutional money is trickling in.
As well as MicroStrategy, we have seen insurance giant MassMutual invest $100 million into Bitcoin, and payment giant PayPal has started accumulating Bitcoin for its new Bitcoin service.
The Office of the Comptroller of the Currency (OCC) said last year that all nationally chartered banks in the US could provide custody services for Bitcoin.
This is expected to become law this quarter, thus ‘opening the doors to hedge funds’, according to Raoul Pal.
The Real Vision CEO is one of the biggest names from the macro world and has regularly spoken about ‘the institutional wall of money’ that he ‘knows’ is set to enter the space.
Pal, who writes the monthly GMI investment report for many high net worth firms, said Bitcoin’s supply and demand imbalance was like nothing he had ever seen before.
‘There is no supply. I have literally never seen a situation like this before where there is no supply coming into the market, and demand is going up everyday because institutions are coming in.’
Slowly at First, Then Suddenly
The institutions are clearly gaining exposure to Bitcoin. From overwhelming naysayers, calling Bitcoin a “fraud” and “rat poison” just a couple of years ago, to a demand for Bitcoin that is quickly growing.
Bitcoin is still a nascent asset, and this week’s price activity proved that the volatility is still here. As Bitcoin grows and as governments continue to print more money, however, institutional money will have to look faster for an uncorrelated hedge against inflation.
2020 was a breakthrough year for Bitcoin being institutionally respected. 2021 and beyond will see a wall of money flood the Bitcoin space.
Author: Tommy Limpitlaw
Why should I buy Bitcoin?
Bitcoin is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent.
How much should I invest in Bitcoin?
Bitcoin is a new technology, and an asset that is finding its value. It has great potential, but the price is volatile, so investing in it should only be for those who understand it and have faith in it. And only invest as much as you can afford to lose.
How do you make money with Bitcoin?
There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.
What is the point of Bitcoin?
Bitcoin is a decentralized money. A money that nobody can control or manipulate, and a money that nobody can print and devalue. It’s also not necessary for any third party to verify transactions, so it makes it much faster and cheaper to send value. It’s also money built on the Internet: a society of almost 5 billion people.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.