Goldman Sachs Cautions Rich Clients on Crypto Craze, Belittles Bitcoin

Goldman Sachs Cautions Rich Clients on Crypto Craze, Belittles Bitcoin

With the correction which occurred on the crypto market last week, the talks about the start of a huge crash (so-called ‘bubble-bursting’) stirred up. Against this background, the shark of the financial business decided to come out with an official statement.

The American multinational finance company Goldman Sachs said cyber money’s value would not be maintained ion the same level it is right now. Therefore, the finance titan notified its most opulent customers that they should try not to become victims of virtual money craze. In the particular caution, Goldman Sachs also pointed out that this frenzy has surpassed the bubble margin.

Bitcoin Is Not Blockchain: Goldman’s Explanation of Delusion

The caveat of Goldman Sachs is displayed on 108 pages in a paper called “(Un)Steady as She Goes.” The firm’s Private Wealth Management bureau turned to its customers with over $10 million in investable possessions with the following message in particular:

“While we do not know if bitcoin or any other cryptocurrency will double or triple from prevailing prices, we do not believe that these cryptocurrencies will retain their value in the long run in their current incarnation.”

Albeit mentioning that BTC and its brethren do not offer any essential benefits, the firm explained that it remains pretty optimistic concerning the potentials of cyber money and blockchain on the whole. In the release, it was stated that the company regards the idea of blockchain as vigorous thanks to its simplicity of usage across the world, prevention of money laundering and other malicious actions as long as all operations can be tracked, security policies, as well as cheap transactions. However, Goldman emphasized, bitcoin, in particular, does not offer all that.

So the reason, why BTC surges in price, is rather speculation than the rational background that the currency offers. Sticking to such ideology, Goldman reminded that bitcoin frenzy could have bubble traits and even compared it to the tulip craze in the 1600s. The firm made it clear that they do not hesitate on whether the rate of BTC has been mostly driven by speculation or not. Goldman believes that virtual money has ferried the bubble margins on the market.

No Worries For Big Finances

But even if the bubble goes off, Goldman stated, it is unlikely that the traditional financial market and the worldwide economy will be affected that much. Arguing Wells Fargo latter analysis, the firm emphasized that classical stock market will be able to hold on, at least how the current market allows forecasting it.

By the way, in December 2017, one of Wells Fargo analysts, Christopher Harvey said that in his opinion the plunge of prices in cyber money market started influencing equities.