Wall Street Goldman Sachs has again clarified its view on Bitcoin and other digital currencies, and it is still negative.
In an internal conference call titled “US Economic Outlook & Implications of Current Policies for Inflation, Gold, and Bitcoin,” the bank executives discussed the business opportunities post COVID-19 outbreak.
The leaked slides of the presentation of the investment bank show that it does not see Bitcoin as an asset, even after the digital currency received “enormous attention.”
According to Goldman Sachs, Bitcoins cannot be categorized as an asset because they do not generate cash flow like bonds or earnings through exposure to global economic growth.
Bitcoin does “not generate cash flow like bonds.” Because it’s not a bond. And the sky is blue.
— Cameron Winklevoss (@winklevoss) May 27, 2020
“We believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients,” the slide stated.
“We also believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”
The bank is also critical about cryptocurrencies due to their involvement in illicit activities such as Ponzi schemes, ransomware, money laundering, and darknet markets.
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Crypto community hits back
The crypto community, however, came in defense of the digital currency and its arguments against it.
Well-known personalities like Tyler Winklevoss and Cameron Winklevoss also attacked Goldman Sachs for its past practices.
Goldman Sachs: In 2019, $2.8 billion in Bitcoin was sent to currency exchanges from criminal entities.
Fun Fact: Goldman Sachs facilitated $6 billion in money laundering via 1MDB scandal between 2012-13.
Double standard much?
— Tyler Winklevoss (@tylerwinklevoss) May 27, 2020
Meanwhile, JP Morgan, another Wall Street bank, recently added its first two crypto-related customers, Coinbase and Gemini, for providing banking services. Notably, the bank’s head was very critical about Bitcoin and even called it a “Ponzi” scheme.
— Neeraj K. Agrawal (@NeerajKA) May 27, 2020