An analyst at Goldman Sachs believes that Bitcoin is on its way to maturity and more institutional funding is needed to stabilize the market.
Goldman Sachs analyst Jeff Currie believes that Bitcoin (BTC) is well on its way to maturity. He adds that more institutional money will stabilize the market. The analyst shared his views during an interview with CNBC on Tuesday, adding that Bitcoin's remarkable run piqued interest on Wall Street.
Currie, head of commodity research at Goldman Sachs, noted that despite Bitcoin's massive growth, more institutional funding is needed to stabilize it. Institutional funds are necessary to avoid the collapse that caused the price of Bitcoin to drop around 20% on Monday. The price of BTC fell to almost $ 32,000 after reaching a high of more than $ 40,000 last week. However, it is on the mend and is currently trading near $ 38,000.
Currie said: "I think the market is becoming more mature. I think all emerging markets have this volatility and the risks that accompany it”. Currie claims that the key to creating a certain level of stability in the Bitcoin market is increasing the proportion of institutional investors. The institutional share of Bitcoin is currently quite low. Currie claims that institutional investors account for only about 1% of Bitcoin's total market capitalization of $ 600 billion.
More and more institutional investors are advocating for Bitcoin. Famous investors Paul Tudor Jones and Stanley Druckermiller have already ventured into BTC. Additionally, companies like MicroStrategy, MassMutual, and Ruffer Investment Company have taken significant positions in Bitcoin.
Last month, Skybridge Capital launched its $ 25 million Bitcoin fund. They are working to increase market share in the coming months. Guggenheim is another institutional investor who is also aiming to enter the cryptocurrency market. The SEC filing of the securities firm shows that it plans to invest $ 500 million in Bitcoin through the GBTC.
Investors increasingly view Bitcoin as a store of value, with the cryptocurrency experiencing unprecedented growth despite the economic impact of Covid-19. JPMorgan strategists forecast a long-term rally for Bitcoin to $ 146,000, while Guggenheim's chief investment officer believes the cryptocurrency will hit $ 400,000.
Goldman Sachs wasn't a big Bitcoin fan to begin with, but the investment bank has changed its mindset in recent years.