June 22, 2021

Goldman Sachs Explores Crypto as an Asset Class, Reconsidering Old Stances

3 min read

Goldman Sachs, one of the most crucial banks in the United States -and the whole world- released a report on cryptocurrencies, and its content is quite promising for the ecosystem.

The report “Crypto, a new asset class” is not yet readily available to the general public. Still, it has actually already been shared on socials media by investors with early access to these examinations.

Alex Krüger, creator of possession management firm Aike Capital and active Crypto Twitter commentator, shared part of the report, stating it should be available in full “whithin a few days.”

Experts Tell Goldman Sachs Why Cryptocurrencies Are Proving Their Value

The report goes over the nature of cryptocurrencies as an asset class. To do so, it gathers the viewpoints of several experts in the field, such as Galaxy Digital CEO Michael Nogoratz, Global FX’s Zach Pandl, Michael Gronager of Chainlaysis, and critics such as Nouriel Roubini.

The report explains the most vital characteristics of the leading cryptocurrencies and the usefulness of each one.

In this regard, for instance, the bank describes that Bitcoin functions as a large-cap currency, XRP as a real-time settlement system, Ethereum as a clever contract platform, BNB as an energy token/application, and Polkadot as a blockchain with interoperability abilities. In addition, supplying each project with a distinct function permits some division of their target market based.

Differences among the top cryptocurrencies. Source: Twitter, attributed to Goldman Sachs
Differences among the leading cryptocurrencies. Source: Twitter, credited to Goldman Sachs Goldman Sachs said that Bitcoin’s value lies essentially in its

use and approval. Michael Novogratz claimed that the huge influx of institutional capital is proof of the beauty of cryptocurrencies and the maturity of the marketplaces. Novogratz defends Bitcoin’s nature as a great store of value because of the easy social consensus around the coin. “The world has actually voted that they believe it is [an excellent store of worth]”

For his part, Micahel Sonnesheim, CEO of Grayscale Investments, enhances Novogratz’s view. For him, Bitcoin’s shortage is “a method to hedge versus inflation and currency debasement.”

Sonnesheim also described that although cryptocurrencies were especially impacted by the basic financial crash due to the COVID pandemic, the rebound in 2020 exceeded any other asset, reaffirming the strength of Bitcoin and other cryptocurrencies as a property class.

Bitcoin is Appreciating Over Time, And Investors Should Keep an Eye Open

Goldman Sachs also shared a chart of the price advancement of Bitcoin, revealing that there is a similarity in habits in between the 2013-2016 and 2017-2021 periods. For Alex Krüger, this is a positive point for those who think in the cyclical behavior of markets and could represent an excellent opportunity to invest. Throughout Bitcoin’s history, after every drop – – no matter how significant – – the rebound tends to reach new all-time highs gradually.

BTC Price comparisson. Source: Twitter

BTC Price comparisson. Source: Twitter, credited to Goldman Sachs The report represents a considerable change of position from a discussion in 2015 in which they declared that “Cryptocurrencies Including Bitcoin Are Not an Asset Class” due to the fact that they did not produce cash flow, profits through direct exposure to international economic growth, diversify revenues or protect against volatility, and for that reason did not advise them to their customers.

“We think that a security whose appreciation is primarily based on whether someone else is willing to pay a greater price for it is not an ideal investment for our clients.”

However with a gratitude of almost 600% since then, it appears it may be time to apologize, and this report may be an excellent method to reassess old stances.