Goldman Sachs Ranks Bitcoin as the Best-Performing Asset of 2023

Goldman Sachs Ranks Bitcoin as the Best-Performing Asset of 2023

Goldman Sachs has ranked bitcoin as the best-performing asset of 2023. Bitcoin also manages to find the top spot on 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

Global investment bank Goldman Sachs has ranked bitcoin as 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 the latest data released by Goldman Sachs."

The tweet includes a market performance chart by Goldman Sachs showing the top 25 markets’ total returns as well as the year-to-date risk-adjusted returns.

Bitcoin tops the total return list at 27%, followed by the 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 moved up since the firm published its chart. BTC is now trading at USD 23,130, up more than 39% so far this year.

Gold and Bitcoin

Many people have compared bitcoin to a store of value and a hedge against inflation, similar to gold. But gold has ranked several places below BTC on both counts, the total returns and the risk-adjusted returns. According to Goldman's chart, the metal has a total return of 6% year-to-date and a Sharpe Ratio of 2:0. A higher Sharpe Ratio indicates that the investment has yielded higher returns for a given level of risk.

Goldman Sachs had said in December last year that gold is a better "portfolio diversifier" than BTC since it is less likely to be influenced by stringent financial conditions. The bank’s analysts believe that gold has developed non-speculative use cases, unlike bitcoin.

Goldman Sachs has been in the crypto sector for several years. The firm formally established a cryptocurrency trading desk in May 2021. The investment bank had predicted that BTC could reach USD 100,000 in January 2022, as the crypto continues chipping into gold’s market share. Goldman Sachs executed its first OTC crypto transaction last year, offered its first bitcoin-backed loan, and launched a data service to help investors analyze crypto markets.

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