Bitcoin Wins 2021 Over All Capital Markets, Says Goldman Sachs

Bitcoin may not have met 2021 price expectations, but it was still an incredible year by non-crypto standards. According to data from Goldman Sachs, the primary cryptocurrency outperformed all capital markets throughout last year. Moreover, its growth appears to have come at the expense of gold, which Bitcoin is often compared to as its competitor.

Bitcoin VS The Old Guard

As the investment bank’s equity basket return scorecard presents, Bitcoin saw 60% returns from January 1st to December 31st 2021. Trading at about $29,000 at the beginning of the year, it entered 2022 above $47,000.

Interestingly, Bitcoin had achieved these highs as early as February. However, it spent the rest of the year chaotically moving between $30k and $69k, unable to break resistance.

Nevertheless, its early growth put it ahead of all other indexes on the scorecard. This even included crude oil – up 55% on the year – which saw demand surge following economic reopening worldwide.

The S & P 500 was next on the list, rising 29% on the year. Again, inflationary monetary policy should contribute to its rise significantly. As the US dollar supply increased 40% within two years, the additional liquidity seems to have moved towards assets and stocks. One of the primary beneficiaries of this phenomenon has been Dogecoin lover Elon Musk – CEO of Tesla – whose stock has been up nearly 60% over the past year.

Musk happened to be responsible for some of Bitcoin’s major price movements last year. The coin rallied in February after his company bought $1.5 billion worth of the asset but happened to collapse in May once he ceased accepting it for car payments.

Gold Gets Digitized

2021 was a year of extreme inflationary pressure, rising to 6.8% this November – the highest in 40 years. Nevertheless, gold – often thought of as an inflation hedge asset – has failed to rally, only rising 4% across the year. The support has been range-bound between $1000 and $2000 per ounce for ten years.

According to an analysis from JP Morgan, many investors ditched gold for Bitcoin late last year. Among these was billionaire hedge fund manager Paul Tudor Jones, who said he preferred the digital asset over its physical variant.

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Microstrategy CEO Michael Saylor maintains that Bitcoin should soon replace gold. He calls it a most significant asset in every way, from its weightlessness and portability to its absolute scarcity.

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