In Goldman Sach’s midyear economic-outlook report, the bank’s investment strategy group says the price of bitcoin is likely to decline even further than the 45% it has in the first seven months of 2018.
This is despite plans that the investment bank was going to open a bitcoin trading desk earlier this year. It seems Goldman Sachs has a negative outlook on the future of Bitcoin.
The team lead by chief investment officer Sharmin Mossavar-Rahamani (pictured above) said:
“Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected. 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.”
Blockchain technology and cryptocurrencies have been talked about as disruptors to the global financial system, theoretically allowing for more efficient databases, quicker transactions, and more transparent operations. It seems that Goldman believes they won’t have much of an impact on any other asset class.
The report continued:
“Importantly, we continue to believe that such declines will not negatively impact the performance of broader financial assets, because cryptocurrencies represent just 0.3% of world GDP as of mid-2018. In fact, we believe that they garner far more traditional media and social media attention than is warranted.”
Earlier this year Goldman touted its plans for a bitcoin trading operation, but for now, at least, Goldman’s bitcoin operations will be limited to institutional investors.
Many crypto asset investors and traders are seeing this as a bullish signal seeing it as an obvious attempt to ‘talk the price down’:
FYI – 5 months ago Goldman Sachs paid $400million to acquire @Poloniex.
A well timed news article to keep your finger firmly on the sell trigger. Seen it a million times before in the stock market. Goldman love shaking the apple tree via the media. https://t.co/ZEAQ1sItPa
— $carface (@TraderScarface) August 3, 2018