The cryptocurrency space was rocked in the week when its path of mainstream adoption and interest from the bigger financial institutions took a rather big hit. Wall Street Bank, and one time strong believer in the cryptocurrency and blockchain revolution, Goldman Sachs, explained to their investors that they felt Bitocin was not an asset class.
The reasoning behind this was explained, but many held issues with the explanation as it seems dated and near sighted — especially from a bank that has had its dabblings in the crypto space. Even more so, the current climate is baying out for a new asset class and Bitcoin has certainly aligned itself.
However, while the cryptocurrency space came out in defence of the coin, a US Economist has said that the calls from the bank were right and BTC should not be seen as an asset. US Economist Prof Steve Hanke took to twitter to explain that the bank’s reasoning is a wake up call and a reality check for Bitcoin.
There is no doubt that Prof Steve Hanke is sceptical of the cryptocurrency space as he has always criticized them by comparing them to tulips or by terming them as speculative assets but not currency. He was sledged by many but yet received good responses too.
Goldman Sachs, one of the big banks in the US, recently reported on Bitcoin and other cryptocurrencies and provided various reasons for why it does not consider bitcoin as Assets and Prof Hanke stood in support. He labeled it as a ‘Reality Check’ for the cryptocurrency market. He further suggested the investors try their luck in Vegas rather investing in cryptocurrencies.
“Goldman Sachs brings a much needed reality check to the #Cryptocurrency market. #Bitcoin & other cryptos provide no cash flows or diversification. Cryptos are just highly speculative assets. Investors would be better off taking their chances in Vegas,” he tweeted.
Of course, there is nothing wrong with having a differing opinion and stating that Bitcoin is not an asset when the majority of users feel that it is, the concern is though that Goldman’s explanations are not that clear, and look to be taking a step backwards.
Goldman Sachs was one of the bigger proponents of Bitcoin when it first started stirring, but the bank is now viewing the coin with renewed scepticism while other banks have gone forward. A look at JP Morgan and its view on Bitcoin under Jamie Dimon, and where they are today with Bitcoin, is entirely different.