Goldman Sachs, one of the biggest investment banks in the world, released a mid-year outlook-report, in which it is not at all optimistic about bitcoin’s future.
In their report, Goldman Sachs listed cryptocurrencies as an “unsteady factor threatening the outlook,” and believes that this sphere is getting too much attention. The company doesn’t have a very lenient attitude towards crypto expecting further declines, noting that since late 2017, when the price of bitcoin was at an all-time high, the coin’s price dropped 60%, and ethereum fell 70% in price since early 2018, when it cost around $1,400. The stand Goldman Sachs has taken is by no means a pro-crypto one claiming that “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.”
The investment strategy team of the company does not believe that crypto will retain value, commenting that the opinion of the firm has not deviated from this position and that the current situation is proving this, and expect “further declines in the future,” of crypto prices, since digital currencies are unable to work a medium of exchange.
However this pessimistic prediction is aimed solely at the crypto market, and the firm does not believe that the crypto situation will affect the “the performance of the broader financial assets,” since the overall weight of cryptocurrencies is only about 0.3% of the global GDP.
Despite their disapproving view on crypto, Goldman Sachs has previously stated that they will be launching a crypto trading desk. If this occurs, the investment bank will be one the first on the crypto scene.
This skepticism towards crypto from the investment giant comes at a time, when both UBS, a major Swiss multinational financial company, and the Dutch central bank expressed their lack of faith in the stability of cryptocurrencies.
WHY IS THIS IMPORTANT?
- Goldman Sachs is a giant player on the finance market and their opinions and prognosis can affect the attitude of others towards cryptocurrencies.
- Such a report has also the power of influencing the situation on the crypto market.