Goldman Sachs Believes Bitcoin Will Never Hit New Highs

via QuoteInspector.com
Voyager
Voyager

Goldman Sachs (GS), one of the largest investment banks in the world, does not see Bitcoin (BTC) ever recovering from the year’s 45% drop, despite the firm recently opening a Bitcoin trading desk to institutional investors earlier this year.

In its mid-year economic outlook report, the bank’s investment strategy group tore into the entire digital currency asset class, questioning the very nature of cryptocurrencies as a currency.

We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.

Goldman Sachs also states that it does not see cryptocurrency disrupting the traditional financial institutions any time soon, noting that digital assets represent just 0.3% of world GDP as of mid-2018. The group even went as far as to say that the current traditional media and social media attention of cryptocurrency is not warranted given their relative size.

The report drops just weeks after the Goldman Sachs named David M. Solomon to succeed Lloyd Blankfein as the investment bank’s next chief executive officer. Solomon seems to be in favor of cryptocurrency, as confirmed in an interview with Bloomberg. Whether Solomon will ultimately work to change the bank’s strategy groups opinion of crypto is unclear.

Earlier this year, Rana Yared, one of the executives overseeing Goldman Sachs’ new trading operation, said in an interview that a major driver behind the decision was the growing pressure from the bank’s clients, who are interested in holding Bitcoin in a similar manner to precious metals.

“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value.”

There is no indication at this time just how many institutional clients are investing in digital currencies through Goldman Sachs, but it is clear that the bank’s current sentiment conflicts with the largely bullish outlook shared by many investors.

More: GOLDMAN SACHS: Bitcoin is never coming back

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

 
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