- Goldman Sachs tells investors why Bitcoin is not considered as an asset class.
- The investment bank singles out dangerous hacks, illicit activities, and volatility as some of the reasons.
The largest investment bank in the United States does not believe Bitcoin to be an asset class. According to Forexlive, a financial news outlet, Goldman Sachs presented several reasons the institution is making this stand regarding Bitcoin.
The leaked slides of the presentation to investors reckons that the danger of hacks, extensive losses surrounding cryptocurrencies and the numerous illicit activities are the reasons behind the bank’s decision. Other comments Goldman Sachs said in regard to digital currencies are the inherent lack of cash flow, their inability to generate earnings as well as volatility.
The above reasons behind the sentencing of Bitcoin as “not an asset class” are not new. Besides, some would argue that the ongoing COVID-19 pandemic has proved that any market can be volatile. The stock market in the US plunged massively in March. The same market is doing relatively well now after the government took measures to ensure that damage to the economy is controlled. Bitcoin on the other hand, did not need anybody to recovery from the March 12 dip to $3,800.
Bitcoin is trading slightly below $9,200 at the time of writing. This follows a recovery from the support at $8,800. The market is expected to continue with the upside action towards $10,000 as long as BTC/USD can hold support above $9,200.