By
Steve Muchoki
April 19th, 2024
According to Goldman Sachs, many of the indicated stocks have “dramatically outperformed” the broader stock market.
Goldman Sachs Group Inc (NYSE: GS), a leading investment bank, in a note to investors pinpointed crypto-related stocks that incidentally outperformed the traditional stock indexes. According to the note, a total of 19 crypto-related stocks outperformed the S&P 500 gains year-to-date. Notably, companies that have directly invested in Bitcoin and other digital assets have made profits three times on average in comparison to traditional stock indexes like the S & P 500.
The note to investors that was sent out on April 27 highlighted United States stocks that had a market capitalization of more than $1 billion and had close ties with the cryptocurrency industry and also the blockchain industry.
This comes even as the United States Security and Exchange Commission (SEC) delays approving a Bitcoin ETF. Hedge funds and other institutional investors are rushing to cryptocurrency-related stocks to get exposed to the crypto-mania. Nevertheless, there are hopes of possible Bitcoin ETF approval by the US SEC as the Canadian counterparts record more institutional investors into the crypto industry through the recently approved Bitcoin ETF. Moreover, the country could be risking lagging while other global economies recover through technology and crypto-related stocks from the covid crisis.
Crypto-Related Stocks Identified by Goldman Sachs
In a note sent out to investors, Goldman Sachs identified up to 19 crypto-related stocks that significantly outperformed the S&P 500 index, particularly in the first quarter.
According to the firm, many of these stocks have “dramatically outperformed” the broader stock market, with the firms averaging a return of 43% this year, which is more than three times the 13% that the S&P 500 has gained over the same period.
Cryptocurrency mining companies including Riot Blockchain (NASDAQ: RIOT), and Marathon Digital Holdings Inc (NASDAQ: MARA) took the top positions. According to metrics provided by MarketWatch, Riot Blockchain stocks rallied over 3393% in the past year and are now up approximately 138% year-to-date. On the other hand, Marathon Digital Holdings stocks added over 7649% last year and are now up over 226% year-to-date.
According to Goldman Sachs, two big banks BNY Mellon (NYSE: BK) and JPMorgan Chase & Co (NYSE: JPM) have spearheaded blockchain technology adoption through crypto custody and interbank transactions. As a result, hedge funds have significantly invested in those banks that have shown interest in the cryptocurrency market and blockchain technology.
Goldman Sachs also noted that Tesla Inc (NASDAQ: TSLA) significantly outperformed the traditional stock indexes thanks to the recent $1.5 billion Bitcoin investment. Other stocks that were listed included Coinbase Global Inc (NASDAQ: COIN), Square Inc (NYSE: SQ), PayPal Holdings Inc (NASDAQ: PYPL), MasterCard Inc (NYSE: MA), and Visa Inc (NYSE: V).
Most of the hedge funds are betting huge returns from the crypto-related stocks in the next decade.