Goldman Sachs analysts don’t believe in the idea that Bitcoin or any other cryptocurrency should be seen as a worthwhile investment for the company’s customers. During a customer meeting on Wednesday, the investment bank presented a case in which the cryptocurrency is not a usable investment vehicle under the current economic conditions.
The bank’s analysis explicitly stated:
„Cryptocurrencies including Bitcoin are not suitable as an asset class.“
Bitcoin is still described as Ponzi
Some of the main reasons cited were the volatile price movements of cryptocurrencies, their unstable correlations with other asset classes and the lack of evidence that they can serve as inflation hedge. Some of them may also be securities and may be subject to future regulatory problems.
“We believe that a security whose increase in value depends primarily on whether someone else is willing to pay a higher price for it is not a suitable investment for our customers.”
The call also pointed out that while some hedge funds trade Bitcoin to take advantage of the high volatility, the investment group does not recommend Bitcoin for its clients’ investment portfolios.
Bitcoin is good for trading, but not as an investment
The event was hosted by Goldman Sachs’ Investment Strategy Group, which is part of the bank’s wealth management division, which looks after wealthy clients and advises them on asset allocation.Hedge fund heavyweight Paul Tudor Jones’ recent public investment in Bitcoin has fueled speculation that other well-known investors are about to enter crypto, which could open the door for other institutional investors. But Goldman Sachs’ wealth management team appears to be taking the opposite side of the bet.
“We do not recommend Bitcoin on a strategic or tactical basis for our clients’ investment portfolios, although its volatility may be suitable for momentum-oriented traders.”