Goldman Sachs says Currently Bitcoin is on its path to maturity

01/14/2021

Analyst Jeff Currie believes more institutional money is needed to stabilize the market.

After more than a decade of extreme price volatility, Bitcoin (BTC) is finally starting to mature as an asset class in the market, according to Jeffrey R. Currie, Goldman Sachs’ global head of commodities research.

In an interview with CNBC, Currie said Bitcoin’s remarkable run has attracted the attention of many greater institutions, but to be noted that smart-money investors are available in a tiny fraction of the overall market. They should need to come in droves for Bitcoin to stand as a stable asset and avoid a flash crash like we saw recently, he said.

“I think the market is beginning to become more mature,” Currie said of Bitcoin, adding that “volatility and those risks that are associated with it” are common for nascent assets.

He continued:
"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 1% of it is institutional money.”

Some of Wall Street’s biggest names have thrown their weight behind Bitcoin over the past year. Legendary investors Paul Tudor Jones and Stanley Druckenmiller have already invested in the digital asset, and firms like MassMutual and Ruffer Investment Company have acquired sizable positions in BTC.\

A month ago, Anthony Scaramucci’s hedge fund, SkyBridge Capital, submitted an application with the Securities and Exchange Commission to launch a new Bitcoin fund.

That is on top of the tens of billions invested by MicroStrategy, Grayscale, PayPal and Square combined.

Goldman Sachs has even changed its tune on Bitcoin and cryptocurrencies more generally by and large. The firm has not only beefed up its human resources to include digital currency experts, but also issued guidance on the peaceful coexistence of Bitcoin and gold as macro hedges.

Coinbase, one of the world’s largest crypto exchanges, has reportedly tapped Goldman for its forthcoming IPO.