Rejected:Goldman Sachs Doesn't Think Bitcoin is The Next Big Thing
Since the launch of Bitcoin in 2009, the mysterious cryptographic digital currency has shaken the financial world obviously posing a threat to traditional fiat currency that is prevalent in most country’s monetary systems. The pioneering digital currency has experienced a series of setbacks from harsh several country regulations to a serious suppression of its value due to market forces. However, Bitcoin has come to gain remarkable traction as it is now largely accepted as a means of payment by many businesses and entities around the world attaining a record market cap of $237.62 billion in the fourth quarter of 2017.
The Goldman Sachs opinion
Bitcoin since the 2017 historic rise in market cap has experienced dwindling performances in its market cap currently sitting at $168.5 Billion according to CoinMarketCap.
Bitcoin and cryptocurreny got a huge buzz this week alongside Gold based on positive performances in the stock markets and this has gotten stakeholders postulating that Bitcoin may be a veritable digital asset to cushion inflation as Gold was known to do in the 70s.
This claim has been refuted by Goldman Sachs in a call made to clients on May 27 to discuss the potentials of Bitcoin who do not see the digital currency as an asset class to be relied on. A claim that took analysts in the cryptosphere by surprise.
Why this position?
The claim by Goldman Sachs was predicated upon the extreme volatility of Bitcoin as is also peculiar to other altcoins. Bitcoin experiences more uncertainties in its price fluctuations than most popular fiat currencies and assets that it could have probably been used as a hedge against. This claim was substantiated by bringing into focus the loss in value of Bitcoin on Black Thursday at 37 percent which was higher than the S&P 500 which fell just 35 percent. Taking a more holistic approach to analyze and understand the Goldman Sachs position may exonerate the asset management giant who has over $2 trillion of assets in custody.