Goldman Sachs is wrong about Bitcoin

goldman sachs bitcoin

Goldman Sachs posted a lot of incorrect information about Bitcoin and suggested not to invest in Bitcoin as they feel it is not an asset class. They said cryptocurrencies do not generate cash flows but staking coins XTZ and exchange coins BNB do generate cash flows. Bitcoin adds diversification benefits as typical portfolios with exposure to BTC outperformed.

They also added Bitcoin does not provide consistent diversification benefits given their unstable conditions. Inflation is not here yet, but once it is BTC will hedge it. Infact, BTC is already a hedge against inflation in Venezuela, Argentina, Chile and other countries of latin America.

But once inflation hits in very wealthy countries, like the US, the notional demand for bitcoin will be massive.

Goldman Sachs said that they believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for their clients. However, there are equities and commodities like gold that are primarily dependent on expectation of higher price from others.

Let us face it – Bitcoin is an existential threat to banks. No asset goes up in a straight line. Yes, Bitcoin is volatile but so was Gold back in 1971.