After more than a decade of extreme price volatility, Bitcoin (BTC) is finally starting to mature as an asset class, according to Jeffrey R. Currie, global head of commodities research at Goldman Sachs.
In an interview with TBEN, Currie said Bitcoin’s remarkable run has attracted more institutional interest, but noted that smart money investors still make up a tiny fraction of the overall market. They will have to come in droves for Bitcoin to become a stable asset and avoid a flash crash as we saw earlier this week, he said.
“I think the market is starting to get more mature,” Currie said of Bitcoin, adding that “volatility and the risks associated with it” are common for nascent assets.
“The key to creating some type of stability in the market is to see an increase in institutional investor participation and at the moment they are small. […] about 1% of this amount is institutional money. “
Some of the biggest names on Wall Street have thrown their weight behind Bitcoin over the past year or so. Legendary investors Paul Tudor Jones and Stanley Druckenmiller have already invested in the digital asset, and companies like MassMutual and Ruffer Investment Company have acquired significant positions in BTC.
Anthony Scaramucci’s hedge fund SkyBridge Capital last month filed with the Securities and Exchange Commission to launch a new Bitcoin fund.
This is in addition to the tens of billions invested by MicroStrategy, Grayscale, PayPal and Square combined.
Goldman Sachs has even changed its mind about Bitcoin and cryptocurrencies more generally. The company has not only beefed up its human resources to include digital currency experts, but it has also released guidance on the peaceful coexistence of Bitcoin and gold as macro hedges.
Coinbase, one of the world’s largest crypto exchanges, has also reportedly tapped Goldman for its next IPO.