A lot of cryptocurrency news comes from big organizations touting the latest and greatest crypto stocks, but a lot of it is just hype. Goldman Sachs is one of the big players, but they can be hard for a lot of people to take seriously. However, a new report from the Financial Giant shows that crypto stocks can solve the volatility issue that has plagued the cryptocurrency industry for years.
It’s only been two weeks since Goldman Sachs analysts revealed that the banking firm is exploring a new bitcoin trading operation, and the firm has just revealed an even bigger move: it’s also exploring the world of cryptocurrency stocks. Goldman Sachs analyst James Schneider says that the volatility in cryptocurrencies, which range from a few percentage points to as much as 30% in a single day, presents a major issue. However, if the firm were to transition its investment into stocks with similar volatility, the risk would be dramatically reduced.
The cryptocurrency market is defined by volatility. So far, no currency has been able to solve the extreme prices that are often seen in the market. This is according to a recent report by Goldman Sachs analysts, who found that “extreme” volatility is actually the only thing that cryptocurrencies have in common. While some experts attributed the volatility in the cryptocurrency market to factors like lack of regulation, Goldman Sachs analysts determined that the “true cause was something different altogether.”. Read more about new cryptocurrency and let us know what you think.Wall Street megabank Goldman Sachs has started to hedge US cryptocurrency exchange Coinbase with a buy rating following the drop in cryptocurrency markets. In a note to clients Monday, Goldman Sachs analyst Will Nance said Coinbase shares are the best way for investors to gain exposure to the crypto sector, reports CNBC. According to the report, cryptocurrency stocks like Coinbase should be considered a hedge against the parabolic volatility of cryptocurrencies like Bitcoin (BTC). While we believe the core business now offers an attractive growth profile with the potential to achieve further high levels of profitability, we see significant room for new initiatives to create more stable and recurring long-term revenue streams alongside the core trading business, analysts said in a statement. In a buy recommendation on Coinbase shares, analysts at Goldman Sachs set a 12-month price target of $306, which represents a 36% increase in the stock. However, Coinbase’s long-term fate will depend on the continued success or failure of cryptocurrencies as an asset class, according to the client note. Following the new note, shares of COIN rose nearly 3.5% in premarket trading to above $235. The action began on the 14th. April on the Nasdaq at $381. The price increase coincided with a notable surge in cryptocurrency markets, with bitcoin gaining more than 4 percent over the past 24 hours to trade above $37,400. The latest buy recommendation is not the first time Goldman Sachs has mentioned Coinbase as a hot stock. In late April, Goldman Sachs named Coinbase as one of 19 U.S. stocks that significantly outperformed the S&P 500. Earlier reports in December 2020 indicated that Coinbase would approach Goldman Sachs to make a public filing. The news comes shortly after Goldman Sachs began trading bitcoin derivatives in early May, according to Wall Street executives.Cryptocurrency stocks have been rising over the past few years, according to analysts from Goldman Sachs. According to Goldman Sachs analyst Robert Boroujerdi, the cryptocurrency stocks market is poised to take over the mainstream stock market in the next few years. “The market capitalization of cryptocurrencies has risen over the past few years, with some of the largest digital currencies more than tripling in value in the past 12 months,” Boroujerdi wrote in a note to clients Thursday. (Article Excerpt) As the cryptocurrency market continues to grow, there is increased interest from investors and businesses in using blockchain technology with traditional financial services, according to Goldman Sachs. The bank said that “there are more use cases for private blockchains. Read more about bitcoin news today and let us know what you think.
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