Goldman Sachs distinguished 19 blockchain and cryptocurrency-related stocks that have exceeded the S&P 500 this year.
Goldman Sachs announces that Blockchain Capitals, on average, outperform the S&P 500 of the year (excluding the Bitcoin).
On outperforming the S&P 500
According to leading giant Goldman Sachs, U.S. assets exposed to blockchain and cryptocurrencies have outperformed the S&P 500. The outperformance of Standard & Poor’s 500 Index (S&P 500) is by about 34 percentage scores for the year to date.
Consequently, it sustains as a reminder of how the fast-growing technologies’ interest extends to investors in established markets.
This announcement by Goldman Sachs clearly left inferences of many theories and conclusions. Additionally, the news also arrives, especially when the cryptocurrencies let their value known out loud as the market and investors proliferate.
Crypto analysis by Goldman Sachs
Firstly, The Wall Street firm recognized 19 stocks with a market value of at least $1 billion. Subsequently, the firm also denoted the high exposure to blockchain technology or cryptocurrency.
On average, the assets have soared 46% year to date, versus 12% for the S&P 500. This analysis is as told by the Goldman report dated April 26. Notably, the standard lagged following a direct stake in bitcoin (BTC), which expanded 89% over the period.
Marathon Digital Holdings (NASDAQ: MARA), Microstrategy (NASDAQ: MSTR) as well as Riot Blockchain (NASDAQ: RIOT) are in Goldman’s blockchain revealed stock list. Additionally, the report by Sach also denotes the inclusion of traditional fiscal companies like Visa (NYSE: V) and JPMorgan Chase (NYSE: JPM).
Breaking down the procedure of Stock selection
Goldman picked stocks involved in blockchain indexes and ETFs. Consequently, it calculated the responsiveness of stock prices to bitcoin over the past 12 months.
Finally, they then browsed company filings to identify 19 stocks with blockchain presentation.
Estimated year-over-year first-quarter earnings growth for S&P 500 cos rose to 31% from 25% in the past week, based on Refinitiv data, driven by last week's stronger-than-expected results from Wells Fargo & Co , Goldman Sachs Group Inc and other banks. https://t.co/36aq37JWH3
— ETMarkets (@ETMarkets) April 20, 2021
“An equal-weighted selection of the stocks has expressed roughly 60% similarities with bitcoin and the Bloomberg Galaxy Crypto Index,” the report from Sach’s reads. “Additionally, these similarities span over the last few months, compared with 20% correspondences for the S&P 500,” they add.
Other conclusions inferred by the report
11 of the 19 blockchain assets are in the software as well as the services industry. Subsequently, these quickly trade at double the price-to-earnings estimate as to the median U.S. stock.
Additionally, there also exists a separate cradle of blockchain stocks that underperformed the S&P 500. These stocks underperformed by approximately 10% over the past two weeks.
Conclusively, this development is due to the dip and fall in cryptocurrency prices. Although, they outperformed by about 2% on Monday as bitcoin backtracked nearly 30% of the primary sell-off.
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