On Monday, Goldman Sachs published a report on the ongoing trends around the adoption of Bitcoin (BTC) and Ethereum (ETH). As per the report, on-chain analytics for May show a mixed sentiment for the adoption of the two largest cryptocurrencies by market capitalization.
Goldman Sachs is the second largest investment bank in the world by revenue and is ranked 57th on the Fortune 500 list of the largest United States corporations by total revenue. The report also studied the investors’ sentiment for the assets across the different cohorts.
According to the report, there haven’t been much changes to Ethereum balances across different investor cohorts. However, Bitcoin addresses holding more than 100,000 coins are witnessing a considerable decline. The report stated that Bitcoin has been witnessing a monthly decrease of about 31%.
The bank also commented on Bitcoin’s realized profits trend witnessed this month breaking records of past years. The report observed the spent output profit ratio (SOPR) for Bitcoin, which indicates the degree of realized profit, to record the observations.
It highlighted that SOPR values saw several surges during the month, reaching levels not seen since December 2020, “suggesting that considerable profit taking has taken place in the spot markets.” In finance, profit taking is the practice of selling an asset, mostly shares, when the asset has risen in price.
Further, it noted that the amount of Bitcoin held on exchanges saw a steep decline of 12%, a level that had not been achieved in years. Notably, the data put by Goldman Sachs aligns with the figures reported by Todayq News. However, the report added that the trend was opposite in case of Ethereum supply as it saw a slight gain.
Additionally, the bank stated that the network congestion across both the Bitcoin and Ethereum blockchains was also a key focus in May. It quoted data which revealed that the congestion caused monthly address activity for Bitcoin and Ethereum to drop by 13.8% and 16.7% respectively, as user activity was deterred by higher transaction fees.
According to the report, the Bitcoin average mean hash rate continued to push past it’s all time high (ATH) in May, gaining 5.4% during the month, with miner revenues increasing by 16.4%, the report added. Hashrate refers to the total combined computational power that is being used to mine and process transactions on a proof-of-work blockchain.
Notably, the bank’s assessment of profit-taking also resonates with the analysts’ implication that investors buy when prices are low and sell at high prices. As the price of Bitcoin plunged to $25,000 levels from $27,000 levels on Monday, Twitteratis echoed the discussion of crypto assets primarily Bitcoin and Ethereum.
Goldman Sachs has shown engagement with the crypto and the larger blockchain sector in various ways including hiring of required staff and creating a guidebook on crypto investments for interested investors. Additionally, with the purchase of an OTC Bitcoin non-deliverable option (NDO) from Galaxy Digital, it became the first significant bank to conduct an over-the-counter (OTC) cryptocurrency transaction.