Goldman Sachs Says Bitcoin Needs Use Cases to Reduce Volatiality

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

Per a CoinDesk article, Goldman Sachs noted in a research report that a decade of “easy money” is coming to a close. In order 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.

The tightening of monetary policy by the U.S. Federal Reserve has been putting downward selling pressure on assets like gold and bitcoin as of late. Goldman Sachs did note, however, that gold has been more stable relative to its digital counterpart.

As the report said, “Tight financial conditions are expected to be a drag on bitcoin’s user adoption, the report said, and this makes a repeat of the cryptocurrency’s strong returns of the last decade less likely. Volatility will likely remain elevated until it develops more use cases.”

“The development of real use cases is also crucial to reducing bitcoin’s volatility, but is by no means guaranteed and may take a long time to play out,” wrote Goldman Sachs analysts Mikhail Sprogis and Jeffrey Currie.

Feeling Bullish on Bitcoin for 2023?

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

BITO provides the gateway for investors who want crypto exposure to diversify their assets, but at the same time want to remain within a safe, regulated market. While the crypto market is growing and the government is looking into improving regulatory measures, BITO can give investors the regulated crypto exposure they desire.

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

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

For more news, information, and analysis, visit the Crypto Channel.