In a circular to investors, analysts from the very prestigious United States bank, Goldman Sachs, noted that a basket of securities composed of 19 shares of pro-crypto companies would have performed better than the S&P 500 index.
Indeed, the 19 shares have already recorded a growth of 43% on the stock market for this year. However, the index, which represents more than 80% of companies in the American economy, has only increased by 13%, or three times less than the basket of securities.
A stock market performance worthy of the crypto trend
The cryptocurrency industry has experienced tremendous growth during this year. The flagship asset of the industry, namely Bitcoin, is multiplying its feats. For only the first 4 months of the year, it has already increased by 88%. Its performance had not gone unnoticed as Bitcoin would have caught the eye of investors to the point where its adoption is increasing day by day.
By pure coincidence or domino effect, companies that decide to invest in cryptos outperform on the stock market. For example, two companies in the basket of 19 stocks, Marathon Digital Holdings and Riot Blockchain have grown by 218% and 151% respectively in 2021. Tesla has experienced a dramatic rise in its price in recent days. MicroStrategy also saw its price rise in the middle of April when Bitcoin hit its ATH.
According to Bloomberg Galaxy Crypto Index, there would be a 60% correlation between the performance of Bitcoin and that of the basket of securities while for S&P 500 companies, the correlation would not exceed 20%.
Crypto phobia is no longer the order of the day!
The era of bad publicity seems to be over as cryptos are taking hold deep in economies. PayPal had paved the way last year. Then, Visa followed! Afterwards, Tesla spent nearly 1.5 billion dollars equivalent to Bitcoin. MicroStrategy is said to have nearly $ 4.5 billion in Bitcoin in its coffers. Square also has a $ 220 million investment in BTC.
By the way, some believe apart from the speculative aspect, other elements are very important in this adoption of cryptocurrencies. An analyst at investment firm Wedbush Securities said:
“The story and theme here is much broader than just investing in bitcoin and predicting the potential trajectory of its price … These are the potential ramifications that crypto, blockchain, and bitcoin might have to. across the corporate world for the next decade. ”
Suddenly, the fear of holding cryptos is becoming increasingly rare because institutions have become less skeptical about the dark aspects of cryptos.