Goldman Sachs. Source: Reuters
The US multinational investment bank Goldman Sachs continues with its 180-turns on the cryptocurrency industry. After its recent interest that included filing for a Bitcoin ETF and exploring crypto as an asset class, the institutions’ latest report said virtual currencies are not a “viable investment.”
It’s safe to say that Goldman Sachs has displayed a controversial approach to the cryptocurrency space. The latest report coming from the Wall Street giant takes it back a notch by going to its hostile policy from previous years.
Titled “Digital Assets: Beauty Is Not in the Eye of the Beholder,” it touched upon some of the most recent concerns, including high energy consumption required in the process of mining. This topic was raised in May by Tesla’s Elon Musk, who criticized BTC for using too much coal fuel.
Despite numerous reports claiming otherwise, Tesla disabled bitcoin payments citing environmental issues.
The paper also touched upon cryptocurrencies’ usage in ransomware attacks after numerous hacks transpired on US soil in recent months. After each, the perpetrators indeed requested the payments to be sent in bitcoin.
Furthermore, the document named impending regulations as the “biggest risk to the speculative aspects of this ecosystem.” Keeping in mind all of these concerns, the bank concluded:
“After analyzing various valuation methodologies and applying our multi-factor strategic asset allocation model, we have concluded that cryptocurrencies are no a viable investment for our clients’ diversified portfolios.”
The mentioned-above word ‘controversial’ might not be strong enough to describe Goldman’s ever-changing views on the industry.
The institution was among the first regulated entity to launch a crypto trading desk all the way back in 2017. Yet, that came amid the parabolic price increases, and when the year-long bear market followed, Goldman halted the initiative.
In the meantime, Goldman held a conference call in which it said bitcoin is not an asset class. Bank executives repeatedly questioned BTC’s ability to serve as a reliable store of value and blasted its volatility.
Yet again, Goldman restarted the trading desk this year when, once again, prices were skyrocketing to new highs. It also filed for a Bitcoin ETF with the SEC, explored launching custody services, added BTC to its year-to-date returns report, participated in investment rounds in crypto projects, and enabled clients to trade bitcoin derivatives.
With all of that in mind, it’s not such a surprise that Alex Kruger and other crypto community members viewed Goldman’s latest U-turn as nothing out of the ordinary.