Investment banking giant Goldman Sachs may be launching a cryptocurrency trading desk, but that doesn’t mean that the firm is going to start making bullish bitcoin price calls.
Writing in the firm’s midyear economic outlook report , a team of Goldman investment strategists predicted that, despite having already shed more than $12,000 since its mid-December peak, the bitcoin price will likely continue on a downward trajectory.
“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,” the team lead by chief investment officer Sharmin Mossavar-Rahmani said in the report.
“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.”
As CCN.com reported, Mossavar-Rahmani and her fellow analysts had predicted in January that cryptocurrencies would not be able to retain their valuations — then at or near all-time highs — over the long run.
Though bearish for bitcoin and its supporters, the Goldman analysts downplayed concerns that a cryptocurrency market crash would spill into other equities markets, arguing that bitcoin and its peers receive more media attention than their valuations deserve.
“Importantly, 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,” the analysts said. “In fact, we believe that they garner far more traditional media and social media attention than is warranted.”
Notably, though, Goldman Sachs’ bearish view is not shared by the firm’s fellow Wall Street compatriots. Earlier today, Intercontinental Exchange (ICE), the world’s largest stock exchange, unveiled its ambitious plan to launch a new company whose mission is to make bitcoin a mainstream financial asset — perhaps, in CEO Jeffrey Sprecher’s words, the “first worldwide currency.”
Featured Image from Shutterstock