Crypto Critique: Goldman Sachs Stance and Bitcoin’s Rise

Apr. 3, 2024
Crypto Critique: Goldman Sachs Stance and Bitcoin’s Rise

While some majors of Wall Street have welcomed cryptocurrencies, Goldman Sachs has expressed its intention to take a different approach. Sharmin Mossavar-Rahmani, the CIO (Chief Investment Officer) for the Bank’s Wealth Management unit, has warned against cryptocurrencies, stating that the industry is still young and insecure.

However, Sharmin has been against cryptocurrencies for a long time. However, her views haven’t changed, as the corporate world still seeks these currencies as assets. She believes that cryptocurrency isn’t an asset class suitable for investing her money. In her interview with the Wall Street Journal, Sharmin said

“We do not think it is an investment asset class. We’re not believers in crypto.”

However, Goldman Sachs competitors in traditional finance (BlackRock and Fidelity) have ramped up their activities after most clients opted for Bitcoin. Nevertheless, Sharmin stated that the bank’s clients did not register such requests. She came to this conclusion instead because of the difficulty of valuing it. “If you do not evaluate its worth properly, how could you be sure about a bullish or bearish position?” she inquired.

In addition to this, she blamed the industry, calling it hypocritical. She also noted the industry’s incoherence between its call for financial democracy and the reality of a small minority of people making critical decisions.

Cryptocurrency Rebel Criticizes Goldman Sachs

In his latest newsletter, popular Bitcoin investor and entrepreneur Anthony Pompliano lashed out at the Goldman Sachs executive. The executive denied Bitcoin and crypto the ‘investment asset class’ status.

Pompliano underscored Bitcoin’s evolving role as the premier digital currency of the internet. He highlighted that a growing generation, accustomed to digital interactions and spending significant time online, views Bitcoin as the global internet reserve currency and default store of value.

Analyzing comments made in the financial segment, Pompliano gave a rebuttal to the argument that Bitcoin is an investment. This provoked doubt in certain areas, yet he confirmed the substantial volume of funds in the $2.5 trillion cryptocurrency market. As the class grows, more and more institutional investors consider it a legitimate asset class.

In addition, Pompliano disputed the idea that cryptocurrencies are just tools for criminal activities. He presented information showing that illicit deals make up only 0.5% of public transactions, thus adjusting the misconceptions concerning cryptocurrency’s ethical level compared to traditional fiat money.

Referring to volatility risks and accusations of Bitcoin’s lack of value, Pompliano gave an alternative view. He noted that Bitcoin’s volatility is tied to its exchange rate against stable fiat currencies, like the US dollar.

Moreover, its purchasing power has consistently increased compared to fiat over recent years. This contrasted starkly with the declining purchasing power of traditional currencies, such as the US dollar, suggesting Bitcoin’s potential as a hedge against inflation and store-of-value assets.

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