Goldman Sachs gave 8 reasons not to invest in bitcoin
Bitcoin and cryptocurrencies in general do not belong to the asset class, said one of the world's largest investment banks Goldman Sachs. Today, May 27, the company organized a conference for clients on the current state of the economy, gold and problems with inflation. Among other things - the issue of digital money. The materials from this meeting were published by Mike Dudas, founder of The Block information portal, in his Twitter account.
Goldman Sachs in its presentation listed a number of reasons why cryptocurrency cannot be classified as an asset class. The arguments are as follows:
- It does not generate cash flows like securities;
- Does not participate in GDP growth;
- Does not allow diversification of investments due to unstable correlations;
- No downward trend in volatility;
- No evidence that can act as a hedge against inflation.
As a separate item to confirm the high volatility, the company pointed to the daily decline of the bitcoin rate by 37%, which occurred on March 12. In addition, Goldman Sachs analysts noted that cryptocurrencies can be used for illegal activities. For example, it can be involved in the organization of financial pyramids, money laundering.
The company stressed that, although the issue of cryptocurrencies is limited, the number of digital assets themselves is not. Three of the six leading in terms of coin capitalization are "identical clones" of each other, e.g. Bitcoin, Bitcoin Cash and Bitcoin SV, the analysts explained.