Forex and Crypto News

Goldman Sachs does not consider Bitcoin as an asset

15:56 27 May /2020

The information appeared that such a giant as Goldman Sachs announced on May 27 a telephone call to its clients, which will discuss the impact of the current monetary policy on gold, Bitcoin, and inflation.

Some analysts suggested that during this conversation, Goldman Sachs will revise its attitude towards Bitcoin. The adoption of Bitcoin by a bank such as Goldman Sachs could be a major success for cryptocurrencies.

However, as the call approached, it turned out that Goldman Sachs not only did not consider that Bitcoin can be the next best thing, but the company said that cryptocurrencies were not even an asset class.

The Fed is printing record amounts of dollars to support the US economy, this has an impact on inflation. As a result of this, investors are considering various ways to protect their capital from inflation, including cryptocurrency. Until recently, the main refuge for capital was gold. Due to its limited supply, it retains its value in contrast to other assets in monetary terms.

Bitcoin’s recent halving has raised a debate that Bitcoin could be a new way of protecting capital along with gold.

However, insider information about the contents of the call suggests that Goldman Sachs will consider the class in general, and not Bitcoin as an asset class.

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Bitcoin and other assets of this class do not generate cash flows, unlike bonds. And due to the correlation with other assets, such as gold and stocks, cryptocurrencies do not provide the constant benefits of diversification. Also, the disadvantage of Bitcoin is its high volatility. The value of an asset is determined by its demand and the price at which one investor sells Bitcoin to another. Given these facts, Goldman Sachs does not view Bitcoin as a hedge against inflation.

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