Goldman Sachs: Cryptocurrencies based on the Proof-of-Stake algorithm have higher returns
A Goldman Sachs report reports that as of late 2019, exchange-traded tokens and assets based on the Proof-of-Stake algorithm have shown higher returns than the rest of the cryptocurrency market
"As the cryptocurrency market matures, monitoring its segments can help identify which features of the networks offer the greatest returns for investors, as well as see the prospects for practical applications of the technology," said Goldman head of currency strategy Zach Pandl and analyst Isabella Rosenberg
Goldman Sachs: Cryptocurrencies based on the Proof-of-Stake algorithm have higher returns
Exchange tokens are digital tokens issued by cryptocurrency exchanges, such as Binance Coin. Currency-like assets are represented by BTC. The report classifies Chainlink (LINK) as a token used in other applications and Monero (XMR) as an anonymous coin.
The report notes that remittance-related assets (e.g., XRP) outperformed the rest of the cryptocurrency market last November, while DeFi-assets (e.g., Uniswap) gained momentum in January and early February.
Notably, Proof-of-Stake assets have shown higher returns than Proof-of-Work assets since late 2019. PoS assets have had a return of more than 1,000%, while PoW assets have had only about 500%.
What stands out is the dominance of a couple of assets, which significantly differentiates cryptocurrencies from other asset classes. According to the firm, BTC accounts for 46% of the cryptocurrency market and ETH accounts for 20%. By comparison, the top two stocks in the S&P 500 Index account for about 12% of market capitalization.
Report
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