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Bitcoin Popularity Rising as Goldman Sachs Gets on Board

In the latest show of Bitcoin popularity, Wall Street investment bank Goldman Sachs announced the need for analyst coverage. Chief Technician Sheba Jafari wrote in a client report that the bank took the decision “due to popular demand”. It also cited the lack of volatility in other asset classes. While Goldman Sachs is bearish on Bitcoin’s most recent high of $3134, it said it would “re-establish bullish exposure between 2,330 and no lower than 1,915.”

An increasing number of hedge funds are investing in Bitcoin. Publicly traded bitcoin fund XBT Provider has seen a major increase in demand from industrial and retail investors over the past two months. The fund has doubled in size, from $50 million on May 1 to $100 million in June. Data from Hedge Fund Research (HFR) reveal that most hedge fund strategies under-performed both in May and year-to-date. HFR provides data on more than 150 hedge fund indices.

Speaking with CNBC, HFR noted that technology and currencies were the only two strategies that performed well in these time periods. “The FX funds did well because of exposure to digital currencies like bitcoin,” a spokesperson said. Only a handful of hedge funds are currently investing in bitcoin; however, as bitcoin continues to outperform other asset classes, the list is growing. Not unlike bitcoin popularity.

Global financial services firm Morgan Stanley released a report this month called “Blockchain: Unchained”, underscoring a commitment to exploring the technology underpinning Bitcoin and other cryptocurrencies.

Experts weigh in on Bitcoin’s future
According to bitcoin.com, many people have lately offered bullish views on where the price of bitcoin is headed. Among the most optimistic is Blockchain CEO Peter Smith, who has predicted that it “might reach $500,000 by 2025.” Daniel Masters, Chairman of XBT Provider, told CNBC that he expects bitcoin to reach $4,000 by the end of this year. “Bitcoin is emerging as the transactional layer of the internet, as programmable money and as digital gold. That’s the big picture,” he said.

With reference to the growing interest among hedge funds, RT TV host Max Keiser tweeted, “Hedge funds are herd animals. If one starts pouring cash into bitcoin, others will follow; $5,000 within sight.”

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