Goldman Sachs:"Bitcoin is not the new gold"

Did the large investment bank's statement affect the price of Bitcoin? Let's figure out
20 October 2017   1064

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.

Goldman Sachs

Despite the deflationary nature of bitcoin caused by the severe limitation of emissions and its noticeable growth in periods of geopolitical instability, Goldman Sachs is still confident that the crypto currency is much inferior to gold:

Gold wins out over cryptocurrencies in a majority of the key characteristics of money. 

Goldman Sachs

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.

Bitcoin Price Chart

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".

Bitcoin Price Chart
Bitcoin Price Chart

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. 

We Aren't Going to Launch Crypto Desk, - Goldman Sachs

This was said by company's CEO during a meeting of the US House of Representatives devoted to issues of accountability and trust in financial institutions
12 April 2019   250

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.

Referring to the publication of Bloomberg in December 2017, Solomon stressed that the company had never had plans to launch such a trading platform. According to him, the publication incorrectly interpreted the information from Goldman Sachs:

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.

David Solomon

CEO, Goldman Sachs

When asked about the likelihood of launching cryptocurrency products in the future, Solomon answered rather evasively:

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.

David Solomon

CEO, Goldman Sachs

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.