The report said that the cryptocurrency market is maturing
- Decentralized finance-related assets such gained strength in January and early February
- Bitcoin is maintaining its position above the 40-week moving average
- Proof-of-stake performed better than proof-of-work tokens since the end of 2019
In its latest report, Goldman Sachs revealed that Exchange tokens and digital assets associated with proof-of-stake blockchain networks had performed better in the broader cryptocurrency segment than privacy-focused digital tokens, which have underperformed.
The cryptocurrency market is maturing.
Zach Pandl, Goldman’s co-head of foreign exchange strategy, and analyst Isabella Rosenberg co-authored the report. The report said that the cryptocurrency market is maturing. A careful analysis of the crypto’s market segments may help determine which network features investors are rewarding and the prospect for practical applications of the technologies.
The Wall Street firm has a peculiar tryst with cryptocurrencies, and it swings from flirtation to outright animosity. The publication of the report is the latest iteration of this strange riff-raff. In June, one Goldman division dubbed digital assets as not “viable” for client portfolios. However, the company’s analysts continued to cater to institutional investors with in-depth examinations.
Exchange tokens are digital tokens that are released by crypto exchanges such as Binance Coin. On the other hand, currency-like assets are represented by bitcoin. The report categorized chainlink (LINK) as a token used in other applications and monero (XMR) as a privacy coin.
Decentralized finance-related assets gained strength in January
XRP, which is a remittance token, performed remarkably well in the crypto market last November. The report added that decentralized finance-related assets such as uniswap (UNI) gained strength in January and early February.
Proof-of-stake performed better than proof-of-work tokens.
The report revealed that proof-of-stake networks had performed better than proof-of-work tokens since the end of 2019. The report also added that crypto assets are a top-heavy market as compared to other asset classes. Bitcoin has the lion’s share of the cryptocurrency market and accounts for 46% of the cryptocurrency market, and ether (ETH, -2.32%) accounts for 20%. Compare this with the two largest stocks in the S&P 500 index account for roughly 12% of the market capitalization, the report added.
Bitcoin continues its dream run and remains in a long-term uptrend, and it seems it has put behind the crash by 50% from an all-time high of over $63,000 in April.
Buyers were able to prevent the value of BTC from falling below 30,000 after a consolidation phase which dragged on for two months and saw price corrections of an unprecedented scale. However, bitcoin faces resistance at $50,000 to $55,000, which could stall the recovery given short-term overbought signals.
The chart below shows an ascending path formed from the 2017 price of $16,000 and the 2021 all-time high of $63,000. The 2019 and 2020 price lows formed rising support as buyers reacted to oversold conditions.
2018 was a bear market, and thankfully, Bitcoin is maintaining its position above the 40-week moving average, reflecting renewed upside momentum. However, Bitcoin will need to form a decisive break above $55,000 to resolve the selling pressure from May fully.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.