Crypto has become a full-fledged asset class, but prices are still dictated by FOMO and investors face barriers to entry, Goldman Sachs says

Crypto has become a full-fledged asset class, but prices are still dictated by FOMO and investors face barriers to entry, Goldman Sachs says

Fear of missing out on potential gains from cryptocurrencies among investors is a force that's propelled prices higher over the past year, said Goldman Sachs, which also identified three key issues that are holding back clients from diving even further into the space. A throughout this month in the cryptocurrency market has pulled its overall capitalization below $2 trillion. But , the most traded cryptocurrency, has still bulked up about 330% from this time in 2020 when it traded in the $29,000 range, and the token of the Ethereum blockchain, has soared by more than 1,000% from around $205. "There's no doubt that "fear of missing out" (FOMO) is playing a role given how much bitcoin and other crypto assets have appreciated and how many interested parties of all flavors have jumped into this space," said Mathew McDermott, global head of digital assets at Goldman Sachs, in a note. "If you're an asset manager or running a macro fund and your closest rivals are all investing and seeing material returns, your investors will naturally wonder why you are not investing," he said. He added that its clients and others are largely treating bitcoin as a new asset, the emergence of