In a new report, the investment bank Goldman Sachs recognises cryptocurrencies as an asset class, a year after stating the opposite. Screenshots of the document were posted on Twitter by economist Alex Krüger.
Crypto pic.twitter.com/VM02a7UD8C
— Alex Krüger (@krugermacro) May 21, 2021
The bank gathered opinions from cryptocurrency-related firms: Grayscale Investments, Galaxy Digital, Chainalysis, Global FX and others, as well as industry critics.
The authors of the report noted the distinctiveness of many digital assets. According to them, Bitcoin has a high market capitalisation, XRP is a real-time settlement system, and Ethereum is a smart-contract platform.
Goldman Sachs also described BNB as a token for practical applications in apps, and Polkadot as a blockchain platform enabling interoperability across chains.
Analysts at the bank presented a Bitcoin price chart dating back to 2013 and said that digital gold has always recovered to new highs, despite deep price declines.
2013-2016 sv 2017-2021 pic.twitter.com/7b1DG6pHXu
— Alex Krüger (@krugermacro) May 21, 2021
According to Mike Novogratz, founder of crypto bank Galaxy Digital, inflows of institutional investors underscore the appeal of Bitcoin.
“The world has given its verdict, recognising Bitcoin as a good store of value,” the investor stated.
The head of Grayscale Investments, Michael Sonnenshein, called the limited issuance of digital gold a “hedge against inflation and currency debasement.”
Nouriel Roubini, professor of economics at New York University, questioned the willingness of most financial institutions to subject themselves to the volatility and risks of cryptocurrencies.
“Something that has neither yield, practical value nor a link to fundamental economic factors cannot be considered a store of value or an asset in principle,” added the cryptocurrency critic.
The leaker claims that in the coming days the report will be published on the Goldman Sachs site.
If I read that report and were a nocoiner, I’d go look at the charts, recognise this as a great entry point, and go shopping. Granted, I’m not a dinosaur.
— Alex Krüger (@krugermacro) May 21, 2021
“If I had read that report and did not own coins, I would look at the charts, realise this is a great entry point for entering the market, and go shopping,” Krüger wrote.
In May 2020, the bank held an investor presentation titled “Cryptocurrencies, including Bitcoin, are not an asset class.”
“We believe that equity value, whose appreciation mainly depends on whether someone is willing to pay a higher price for it, is not a suitable investment for our clients,” Goldman Sachs said at the time.
In January 2021, CoinDesk, citing a source close to the matter, reported plans for the bank to enter the cryptocurrency market.
In March, a Goldman Sachs survey showed that 22% of the bank’s clients expect Bitcoin price to rise above $100,000 within a year. According to the results, 40% of respondents own cryptocurrencies.
In April, Goldman Sachs chief David Solomon predicted a “major evolution” of the digital assets industry.
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