Goldman Sachs’ much-anticipated report about the state of the economy, gold, and bitcoin was published recently, and it disappointed the crypto community the most. The bank blasted at bitcoin and other coins as it claimed that they are unsuitable investments for its clients. In its report, Goldman Sachs said that it does not recommend bitcoin on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum oriented traders.
The report compared Bitcoin’s run to the tulip mania of the 1600s.
The highly anticipated Goldman Sachs report rebutted many claims made by crypto enthusiasts. The bank compared bitcoin’s run to the tulip mania of the 1600s in the Netherlands, which is considered one of the most infamous instances of speculative bonds. The report claimed that cryptocurrencies are not an asset class, and they do not generate cash flow or earnings and do not provide consistent diversification benefits. The report further noted that there is no evidence that bitcoin or any other cryptocurrencies are an inflation hedge. According to the bank, while hedge funds might find cryptocurrencies appealing due to their high volatility, that allure alone doesn’t form a viable investment rationale.
The Crypto community responds to the bank’s report.
The Goldman Shacs report disappointed bitcoiners and the crypto community in general. The report harshly blasted at cryptocurrencies as it labeled them unsuitable investments for its clients. Several from the crypto community responded to this report on social media. Crypto exchange Gemini co-founder Tyler Winklevoss tweeted that comparing bitcoin to tulips in 2020 betrays stupidity and represents opportunity. He also said that the Goldman report is probably a head fake. They are probably rebranding to “Goldman Stacking Sats” as we speak, he added. Cameron Winklevoss also responded to the report saying, bitcoin was declared a commodity by the CFTC. He added that bitcoin is an asset with a price that is set by supply and demand like gold and oil.
Comparing #Bitcoin to tulips in 2020 betrays stupidity and represents opportunity.
— Tyler Winklevoss (@tylerwinklevoss) May 27, 2020