Food for Thought
Earlier this week, Goldman Sachs, the $90 bln investment banking firm, told its investors and clients that it is becoming more difficult for institutional investors to ignore Bitcoin and the cryptocurrency market.
In a letter to its investors, clients and portfolio managers, JP Morgan analyst Robert D. Boroujerdi wrote:
"With the total value nearly $120 bln, it’s getting harder for institutional investors to ignore cryptocurrencies. There are currently over 800 cryptocurrencies out there, though just nine have a market cap in excess of $1 bln.”
Institutional investors and professional traders are cashing in
Ultimately, for the vast majority of traders and investors, their decision to invest in an asset or a currency boils down to their past performances. Consistently, since its launch in 2009, Bitcoin has outperformed every stock and currency in existence, by incredible margins.
Perhaps more importantly, the Bitcoin and cryptocurrency markets have matured significantly in a span of 12 months, as the cryptocurrency market cap increased from a mere $11 bln to a staggering $126 bln. Overseas markets have evolved, an increased number of governments have legalized Bitcoin and for institutional investors, liquidity for Bitcoin trading drastically increased.
In fact, last week, the Chicago Board Options Exchange (CBOE), the largest options exchange in the US, announced a partnership with the Winklevoss twins’ Bitcoin exchange Gemini to integrate Bitcoin as one of its main assets. Through the partnership and CBOE’s integration of Bitcoin, Gemini CEO Tyler Winklevoss vowed to improve the Bitcoin trading market for retail and institutional investors.
“Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance and regulatory oversight. By working with the team at CBOE, we are helping to make Bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors,” said Winklevoss.
Goldman: doesn’t matter if you believe in the technology, see the rise in value
Most Bitcoin experts, analysts and advisors will likely tell any investors within the sector to only invest in cryptocurrencies or Blockchain networks that they see value in, in terms of a store of value, digital currency and technology.
However, as a multi-billion dollar investment firm, Goldman Sachs and its analysts are focused on increasing gains and profits of their investors, portfolio managers and clients.
Hence, Goldman Sachs explained in a statement that even if investors don’t fully understand the technical intricacies of cryptocurrencies, it is important for investors to recognize the value in Bitcoin, Ethereum and the cryptocurrency market.
Goldman Sachs noted:
“The debate has shifted from the legitimacy of the ‘fiat of the Internet’ to how fast new entrants are raising funds. Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are) real dollars are at work here and warrant watching especially in light of the growing world of initial coin offerings (ICOs) and fundraising that now exceeds Internet Angel and Seed investing.”