Goldman Sachs:"Bitcoin is not the new gold"
Representatives of Goldman Sachs, one of the world's largest investment banks, are convinced that bitcoin is not new gold at all. This is reported by CNBC.
Representatives of the bank believe that precious metals still remain "the most important class of assets" for almost any investment portfolio and the best way to preserve the value.
The use of precious metals is not a historical accident – they are still the best long-term store of value out of the known elements.
Gold wins out over cryptocurrencies in a majority of the key characteristics of money.
Moreover, according to investment bankers, crypto-currency wallets are vulnerable to hacking. The very same crypto-currencies, according to analysts, are subject to "significant regulatory risks". Also, digital currencies are characterized by infrastructure and network risks. As an example of such risks, Goldman Sachs named the recent hardfork of bitcoin, which resulted in a new crypto currency called Bitcoin Cash.
To other shortcomings of bitcoin Goldman Sachs attributed the permanent growth of commissions for transactions, the average size of which in mid-July reached a mark of $ 9.
Finally, representatives of the financial conglomerate stressed that "gold is beyond competition" and it does not yet have worthy alternatives. According to analysts, this noble metal has low volatility and a stable purchasing power.
As we all know, Bitcoin is very volatile and giant amount of factors can affect its price. So, let's check how this statement affected the price of "digital gold".
Don't be afraid of big spikes! If you look closely, you'll notice that price of Bitcoin is set around $5650, ±100$ in last 24h. At the moment of press, Bitcoin average price is $5650.13 (showing growth for 0.04% in 24h) with market cap almost of $94B. So, at the moment, big affect of Goldman's statement can't be seen on Bitcoin price chart.
The CEO of the investment bank Goldman Sachs, David Solomon, during a meeting of the US House of Representatives, said that his company did not plan to launch a platform for trading cryptocurrencies. This is reported by The Block.
First, that Bloomberg article was not correct. Like others, we are watching and doing work to try and understand the cryptocurrency market as it develops. We have some clients that have certain functionality that we've engaged with on clearing physically settled futures, but other than that we never had plans to open a cryptocurrency desk.
We might at some point [explore a desk] in time, but no question when dealing with cryptocurrency it's a new area, there are a lots of issues…unclear from regulatory perspective and it's not clear in the long-run if those currencies will be viable.
The meeting, at which Solomon spoke, was generally devoted to issues of accountability and the problems of citizens' trust in financial institutions. The meeting was attended by the heads of the seven largest US banks.