Goldman Sachs warns the clients about the crypto bubble

Goldman Sachs published a 108-page long document with speculation about the unfortunate future of the cryptocurrencies
23 January 2018   468

The document titled “(Un)Steady as She Goes” was sent out by the famous American financial corp to warn the investors about the grim future awaiting cryptocurrencies. Reportedly, it was sent out to the wealthiest clients of The Firm to round up the events of the last 12 month surrounding Bitcoin and other prominent coins.

The paper was comprised by Sharmin Mossavar-Rahmani and Brett Nelson, both of whom are senior officials at the Investment Strategy Group Goldman Sachs. While the fearmongering and naysaying are ripe throughout the document, there are several good points to consider. While they admit, that technology behind the crytpocurrencies, namely blockchain, is valuable and useful for the future development in different spheres, they go to say that the craze around the whole topic of crypto is overrated and will blow over like any other flight of fancy in the past has done.

As usual with crypto fearmongering, there is a comparison with Dutch “Tulip mania” which we've already seen done a thousand times. There is also a point made about “Stock bubbles” for companies who announced some type of affiliation with blockchain and cryptocurrencies. The Long Blockhain (formerly a Long Island Ice Tea company) has been on the news because of that and has seen their share price rise rapidly. The same goes for the former sport bra company now proudly presented as the Crypto Company. There is no guarantee, that such kind of buff will survive the test of time, the authors point out.

And their main gripe is, actually, not the crypto as a whole, but Bitcoin in particular, because while the advantages of cryptocurrency are apparent, such as transparency and traceability, ease of execution globally, safety of ownership. But Bitcoin doesn't provide anything from this list, on the contrary, the rising TX fees, long settlements, and hackers' recent interest all really contribute to the scepticism, expressed by Mossavar-Rahmani and Nelson.

German Exchange to launch Bitcoin Products

Deutsche Boerse, the Frankfurt Stock Exchange holder, is deciding about the providing cryptocurrency products
24 May 2018   77

Reporting in London on Wednesday, at a significant event of the sphere, Jeffrey Tessler (the firm's chief of customers, products and core markets), declared: "We are deep at work with it." Nevertheless, any move into the crypto space from the stock exchange might not be forthcoming fast. When CME Group and Cboe Global Markets both started bitcoin futures trading last December, Tessler further claimed during the event that Deutsche Boerse is "not at the same stage." According to his point of view, the company is attempting to understand the volatility of the bitcoin market first and insuring clients and regulators are "in line" before stepping ahead with any offerings.

Whilst a move into offering bitcoin products is not definite, the exchange has already been active in the blockchain field. Deutsche Boerse unvealed details to CoinDesk about its plan to move the majority of its post-trade services to a blockchain last June. It affirmed at the time that it was interested in building a system, using Hyperledger's open-source Fabric protocol, in order to transfer securities and move commercial bank money, while still undertaking cross-jurisdictional compliance with regulators.

Also, as recently as March, the group declared it wish to deploy a platform for more operative securities lending using R3's Corda blockchain tech.