crypto strategy

Goldman Sachs Says Bitcoin Needs Use Cases to Reduce Volatility

Bitcoin will have to provide more than just serve as a vehicle for price speculation, according to global investment firm Goldman Sachs. This, in effect, could give bitcoin the additional price catalyst it needs to break out of its current price action.

By a CoinDesk Article, Goldman Sachs noted in a research report that a decade of “easy money” is coming to an end. For bitcoin to break out of its current price again, it will need to provide tangible value that goes beyond its use as a speculative asset.

Tighter monetary policy from the US Federal Reserve has recently put downward selling pressure on assets like gold and bitcoin. Goldman Sachs however noted that gold was more stable compared to its digital counterpart.

As the report states, “Tight financial conditions are expected to dampen user adoption of bitcoin, the report states, making a repeat of the cryptocurrency’s strong returns of the past decade less likely. Volatility will likely remain high until it develops more use cases.

“Developing real-world use cases is also crucial to reducing bitcoin’s volatility, but is by no means guaranteed and can be time-consuming,” wrote Goldman Sachs analysts Mikhail Sprogis and Jeffrey Currie.

Feeling bullish on Bitcoin for 2023?

Of course, tangible use or not, bitcoin could still benefit from a rebound, especially given the 2022 the leading cryptocurrency had. That said, investors looking to gain exposure to bitcoin without using a crypto exchange can take a look at the ProShares Bitcoin Strategy ETF (BITO).

BITO provides the gateway for investors who want exposure to crypto to diversify their assets, but at the same time want to stay in a safe and regulated market. As the crypto market grows and the government seeks to improve regulatory measures, BITO can give investors the regulated crypto exposure they want.

Additionally, the fund is actively managed, giving investors the peace of mind of knowing that their investments are in the hands of experienced portfolio managers. Bitcoin can be a volatile asset and active management can make portfolio changes on the fly when market conditions warrant adjustment.

BITO is an alternative to gaining decentralized exposure without direct access to the asset. Given the current economic uncertainty and the recent fallout from the FTX crash, now might be a good time to do so.

For more news, information and analysis, visit the Encryption channel.

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