The cryptocurrency market is no stranger to backlash from mainstream communities and establishments. Many have come forward over the past few years claiming that assets like Bitcoin are speculative and that holdings will lose their value sooner than later.
Goldman Sachs was the latest banking institution to attack Bitcoin and its characteristics by pointing at its rollercoaster price movement. Claims that the world’s largest cryptocurrency was “not an asset class” did not go down well with crypto supporters who took to social media to voice their concerns.
On Wednesday, Goldman Sachs stated that there was no use case for Bitcoin because of its starkly speculative nature. Compared to the promise and reassurance of fiat currency, cryptocurrencies depend on other people buying and selling their assets, said the American bank. The bank’s officials concluded that cryptocurrencies, in general, were not an asset class as it primarily depended on whether “someone else was willing to pay a higher price for it”.
Goldman Sachs made their discussions public ahead of an investor call addressing the impact of the coronavirus on the economic front. The release from the organization said:
“We 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 our clients. We also believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”
Cryptocurrency enthusiasts were miffed with the latest comments from the bank as they expected a positive turn from Goldman. Their positive expectations were based on the fact that other major institutions like Fidelity had already dipped its toes into crypto and blockchain technology. Goldman Sachs even compared Bitcoin’s 2017 bull run to other bubbles in the past, adding that the digital asset industry was not based on any solid foundation.
Despite the negative feedback, Bitcoin surged on the charts as it crossed the $9500 market for the first time in weeks. At press time, BTC was trading for $9500 with a total market capo of $174.69 billion. The 4 percent hike over the previous 24-hours had increased the daily trading volume to $36.46 billion. Overall it was a good week for Bitcoin as the weekly gain also treaded in the bull region.
Several cryptocurrency enthusiasts came forward to support Bitcoin, with none being more vocal than the Winklevoss twins. The co-founders of Gemini stated that Goldman Sachs needed to update its arguments against Bitcoin as it felt extremely dated. They even opined that the current comments may be a method employed by the bank to head fake those following the updates.