During a digital conference, Goldman Sachs says that Bitcoin is not a class of investable assets (although they erroneously say only “class of assets”).
For Goldman Sachs Investment Strategy Group cryptocurrencies, like Bitcoin, “are not an asset class”.
As Scott Melker, a crypto trader at Texas West Capital, pointed out, Goldman Sachs, held today, May 27, a digital conference with several bank customers.
The conference title was: “US Economic Outlook and Implications of Current Inflation, Gold and Bitcoin Policies.”
This digital conference was held by Sharmin Mossavar-Rahmani, who is the investment director of the Investment Strategy Group (ISG).
Leaked conference notes
About an hour before the conference began, Melker provided his opinion of the leaked meeting notes:
“Goldman’s meeting notes were leaked. That is the essence.
Fed = brilliant
Dollar = perfect
Inflation = don’t worry
Depression = the economy hit bottom, no depression
Gold = bad
$ BTC = bad and for criminals
Predictable. Taking the same line as the government. ”
Then, about 20 minutes before the start of the conference, cryptocurrency analyst / investor Tuur Demeester, editor in chief of Adamant Research, sent a tweet that included the slide of the leaked notes:
This slide from Goldman’s investor call today exemplifies the income & expansion focused philosophy that benefited Wall Street so much since 1913. When the economy is irreparably overleveraged though, it becomes important to look at assets from a wealth preservation perspective. pic.twitter.com/uA5hsuwNoN
– Tuur Demeester (@TuurDemeester) May 27, 2020
“This slide from Goldman’s call for investors today exemplifies the philosophy focused on income and expansion that has benefited Wall Street so much since 1913. When the economy is irreparably over-leveraged, it becomes important to look at assets from a wealth preservation perspective.”
Translation of the note:
Cryptocurrencies, including bitcoin, are not an asset class
Do not generate money like bonds
Do not generate any profit through exposure to global economic growth
Do not provide consistent diversification benefits, due to their unstable correlations
They do not mitigate volatility, given the historical volatility of 76%
– on March 12, 2020, the price of bitcoin fell 37% in one day
We believe that a security whose appreciation depends mainly on someone being willing to pay a higher price for it is not an appropriate investment for our clients.
we also believe that, although hedge funds may have cryptocurrencies, evidencing their high volatility, this fascination is not a viable investment logic.
As you can see, the reasons for Goldman Sachs not to consider Bitcoin (and cryptocurrencies in general) a class of investable assets (although they mistakenly say “asset class”) are an expanded version of those mentioned in the past by Bitcoin haters like Warren Buffett, Dr. Nouriel Roubini and Peter Schiff.
Goldman Sachs concludes that Bitcoin “is not an appropriate investment” for its customers, as its valuation depends on “The Greater Fool Theory“. In addition, Goldman Sachs says that while hedge funds (such as those managed by Paul Tudor Jones II) may find Bitcoin attractive due to its high price volatility, this “fascination” does not “constitute a viable investment logic” .