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   367

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. 

Goldman Sachs to launch cryptocurrency trading desk

The Goldman Sachs Group plans to set up a trading desk for cryptocurrencies such as Bitcoin by the end of June 2018
22 December 2017   281

The Goldman Sachs Group, a leading global investment banking, securities and investment management firm that provides a wide range of financial services, is reportedly going to launch a trading desk to make markets in digital currencies such as Bitcoin. The bank plans to set up cryptocurrency trading by the end of June of 2018.

In response to client interest in digital currencies, we are exploring how best to serve them.
 

Michael DuVally

Goldman Sachs spokesman

The representatives of Goldman Sachs said in interview with Bloomberg that the company will assemble a team in New York, although the bank did not make a decision where to house the desk, but it is possible that it will function within the fixed-income, currencies and commodities unit’s systematic trading function, which conducts transactions electronically.

In the beginning of November 2017 we have reported that Goldman Sachs CEO Lloyd Blankfein said in interview to Bloomberg that he wasn’t comfortable with bitcoin, but he was open to this cryptocurrency.

At the moment of press, these are main market parameters of Bitcoin:

  • Average price: $13 138,10
  • Marketcap: $220 146 102 687
  • 24h volume: $16 930 200 000