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Goldman Sachs has ranked bitcoin the best-performing asset so far this year. The cryptocurrency also tops the global investment bank’s list as the asset with the highest risk-adjusted return — above gold, real estate, the S&P 500, and the Nasdaq 100.
Bitcoin Outshines Other Investments on Goldman’s Chart
Global investment bank Goldman Sachs has reportedly ranked bitcoin the best-performing asset year-to-date (YTD). The Twitter account Documenting Bitcoin tweeted earlier this week:
Bitcoin is the best performing asset in the world this year, according to latest data by Goldman Sachs.
The tweet includes a market performance chart by Goldman Sachs showing the top 25 markets’ total returns as well as their year-to-date risk-adjusted returns.
Bitcoin tops the total return list at 27%, followed by MSCI Emerging Markets Index at 8%. BTC also tops Goldman Sachs’ risk-adjusted return list, with a Sharpe Ratio of 3.1. The price of bitcoin has risen since the firm published its chart. At the time of writing, BTC is trading at $23,130, up more than 39% so far this year.
Goldman Sachs’ YTD performance chart, showing bitcoin at the top. Source: Documenting Bitcoin on Twitter
Gold, which many people have compared bitcoin to as a store of value and a hedge against inflation, ranked several places below BTC on both the total and the risk-adjusted return lists. The metal has a total return of 6% year-to-date and a Sharpe Ratio of 2, according to Goldman’s chart. A higher Sharpe Ratio indicates that the investment has yielded higher returns for a given level of risk.
However, Goldman Sachs said in December last year that gold is a better “portfolio diversifier” than BTC since it is likely to be less influenced by tighter financial conditions. Furthermore, the bank’s analysts believe that gold has developed non-speculative use cases while bitcoin is still looking for one.
Goldman Sachs has been in the crypto space for several years. The firm formally established a cryptocurrency trading desk in May 2021. In January last year, the investment bank predicted that BTC could reach $100,000 as the crypto continues to take gold’s market share. Last year, Goldman Sachs executed its first OTC crypto transaction, offered its first bitcoin-backed loan, and launched a data service to help investors analyze crypto markets.