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Report: Goldman Sachs researching cryptocurrencies as an asset class



Goldman Sachs, a major U.S. investment bank, appears to have recognized that cryptocurrencies are an emerging new asset class, according to a recent report from Goldman Sachs. That’s despite the fact that just a year ago the bank said bitcoin was “not an asset class” or “an appropriate investment.”

Economist Alex Krüger tweeted that Goldman turned to cryptocurrency-related firms such as Galaxy Digital, Global FX, and Chainlaysis, as well as critics such as Nouriel Roubini, for their opinions and perspectives.

Report: 60% of consumers are willing to pay with cryptocurrencies: On August 4, PYMNTS and BitPay cooperated to conduct a survey of American consumers on their willingness to use cryptocurrencies. Consumers include cryptocurrency holders, former cryptocurrency holders, and those who have never owned cryptocurrency. According to the report, about 60% of consumers are willing to use cryptocurrencies to make purchases. Some consumers say their lack of understanding of cryptocurrencies is the reason they never buy them. A large portion of cryptocurrency holders and those who don’t own any cryptocurrencies believe that cryptocurrencies should be accepted for everyday purchases. Regardless of the challenges Bitcoin and altcoins face in becoming mainstream, these consumers believe that crypto should be used for payments just like fiat currencies. (cryptonews) [2021/8/4 1:34:13]

Report: The impact of local market regulations on Bitcoin prices is relatively short-lived: The Asian Development Bank (Asian Development Bank) released a report saying that by studying the regulations issued by six major Bitcoin markets from April 2013 to February 2018, it was found that local market regulations The press conference caused the price of Bitcoin to fall in the short term. But from the third day onwards, the unusual price pattern disappears. This means that local market regulation has only a short-lived impact on bitcoin prices.

Additionally, the report notes that national regulators working together to form a coordinated approach across jurisdictions may help promote the healthy development of the crypto market. (Ambcrypto)[2020/6/2]

The bank's researchers noted in the report that many large cryptocurrencies are unique and deserve their place in the market. For example, Bitcoin is a highly capitalized currency, Ripple’s XRP is a real-time settlement system, Ethereum is a smart contract platform, Binance Coin is a token for practical applications, and Polkadot is a blockchain platform that can interact with other networks.

Grayscale report: BTC is the best choice for investors under the risk of fiat currency depreciation: Asset management company Grayscale (Grayscale) stated in a document called "Quantitative Tightening" that an unlimited supply of fiat currency may lead to a depreciation of the US dollar. Unsustainable debt levels and fears of widespread defaults are driving the most aggressive monetary policy since Bitcoin’s inception. Fiat currencies are at risk of devaluation, government bonds reflect low or negative real yields, and delivery issues underscore gold's outdated role as a safe haven. In an environment characterized by uncertainty, hedging options are limited. Central banks are currently enacting unlimited quantitative easing (QE), while Bitcoin’s supply has been cut in half. Other sources call this juxtaposition “quantitative hardening,” referring to Bitcoin’s status as “hard.” “currency,” while fiat money is “easy money.” Grayscale concluded: “There are signs that Bitcoin is becoming a safe-haven while maintaining asymmetric returns. (Cointelegraph)[2020/5/1]

Goldman Sachs added that, therefore, the intrinsic characteristics of each cryptocurrency allow it to appeal to a specific user base. Analysts say bitcoin's value depends on its use and distribution. Mike Novogratz, CEO of Galaxy Digital, pointed out that from this perspective, the large influx of institutional capital confirms the attractiveness and high market development of cryptocurrencies.

The same sentiment was echoed by Michael Sonnenschein, CEO of Grayscale Investments, who called Bitcoin’s limited supply “a way to hedge against inflation and currency debasement.” He also noted that while cryptocurrencies failed to escape the turmoil during the 2020 pandemic, they recovered faster and outperformed other asset classes.

However, Nouriel Roubini, a professor of economics at New York University, said he completely disagrees with the notion that something that has no income, no utility, or relationship to economic fundamentals can be considered a store of value or an asset. He's also skeptical that most institutions are willing to take on the volatility and risk of cryptocurrencies, as volatile price action in recent days has served as a reminder.

Analysts at Goldman Sachs also compiled a chart showing all the ups and downs in Bitcoin’s history. The chart shows that, since 2013, Bitcoin has consistently rallied to new highs no matter how deep the declines have been.

Notably, Goldman Sachs stated a year ago that cryptocurrencies are not an asset class.

Since then, however, Goldman Sachs has announced that it will offer bitcoin and other cryptocurrencies to its private wealth management group, and has even launched a crypto trading team.


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