Wall Street investment bank Goldman Sachs has made another U-turn on its stance towards bitcoin as it struggles to define the asset’s investment status.
The investment bank again flip-flopped in its outlook for cryptocurrencies, with a report released earlier this week claiming they are not a “viable investment.”
report, titleDigital assets: beauty is not in the eye of the beholder”, concluded that bitcoin is not a “long-term store of value or investable asset class”.
This contradicts their May 21 report titled “Crypto: A New Asset Class?“Joe was largely positive about the idea and even Matthew McDermott, global head of digital assets at Goldman Sachs, said:
“Bitcoin is now considered an investable asset”.
In turn, this was another Goldman Sachs rebuttal. Presentation Last year where various analysts at the bank cited five reasons why bitcoin was not an appropriate asset class for investors.
In the new report, the bank’s investment strategy group said it wants to keep it safe with regards to the cryptocurrency. The report states, “We have avoided repeating the positive and negative hype that surround this ecosystem because we do not want customers to be seen, even influenced by the cacophony of claims, Many of them are baseless.”
This suggests that bitcoin was not “digital gold” – but in any case, gold itself was not a reliable store of value:
“The argument that bitcoin and cryptocurrencies are a digital version of gold does not provide any value to bitcoin and other cryptocurrencies, as gold itself is not a consistent or reliable store of value,”
Goldman Sachs Investment Strategy Group should sign off on pieces of its research on crypto with “Have Fun Staying Poor”. pic.twitter.com/TiedRBxWhI
— alex kruger (@krugermacro) June 14, 2021
The report also suggested that blockchains themselves are unreliable, concluding that cryptocurrencies and blockchain technology are “built on layers of trust that can be erased.”
“After analyzing various valuation methodologies and applying our multi-factor strategic asset allocation model, we have concluded that cryptocurrencies are not a viable investment for our diverse portfolio of clients.”
Clearly there are divisions in the bank regarding its approach to cryptocurrency. in May, Goldman Sachs leads $15 million investment round for blockchain analytics firm Coin Metrics.
On Monday, June 14, it was reported that McDermott confirmed that the investment bank was Expanding Your Crypto Trading Desk To include Ethereum options and futures.