Goldman Sachs claims Bitcoin will continue to decline, bashes cryptocurrencies

03 Aug, 2018
by Jelmer van der Dussen
News
Goldman Sachs claims Bitcoin will continue to decline, bashes cryptocurrencies

Goldman Sachs is not confident on Bitcoin recovering from the current price drop. The investment strategy group of the bank says that the value of Bitcoin will continue to decline, according to a report of Business Insider.

Earlier this year Goldman Sachs seemed to open up towards the cryptocurrency market by making plans to open a Bitcoin trading desk. However, the investment strategy group of the bank thinks the bears are not done yet, and may never leave.

"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", chief investment officer Sharmin Mossavar-Rahamani says in the Goldman Sachs report, according to Business Insider. "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."

Bitcoin is valued at around $7500 at the time of writing. In December it was still worth $20,000.

The Goldman Sachs investment strategy group is not optimistic on the effect that cryptocurrencies will have. Mossavar-Rahamani states in the report that '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.'

A change of opinion of the investment bank might come soon. In July, Goldman Sachs announced that David M. Solomon will be the next CEO of the investment bank. Solomon is known for his positive attitude towards cryptocurrencies and will be the new CEO of Goldman Sachs starting October 2018.

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Read more about: Bitcoin (BTC)

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