The US “bank of banks,” Goldman Sachs, has a “Bitcoin as Money,” internally published paper circulating, and in it, there are some juicy nuggets of info that reveal the newly-found stance on cryptocurrencies this 150 year-old financial behemoth now professes.
It seems that Bitcoin is now gaining the final recognition that was missing: that of old-school financial giants still running the show based on solid currencies. Not too long ago, it was JP Morgan Chase's, Jamie Dimon, who confessed to making a mistake when he called the digital currency, “fraud”. Now, it seems like the world's biggest institution is also changing its tune, admitting that it could act as a global currency.
One part of “Bitcoin as Money” reads: “Our working assumption is that long-run cryptocurrency returns should be equal to (or slightly below) growth in global real output—a number in the low single digits.” (…) “digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals”.
The research they conducted is based on findings by Zach Pandl and Charles Himmelberg. Their reasoning goes as follows: the US dollar has served its purpose “relatively well” in recent decades. However, it's other regions of the world and financial system where traditional money supplies are comparatively low, where assets like Bitcoin can provide “viable alternatives.” They have cited countries like Venezuela and Zimbabwe as cases in point: “The widespread use of the dollar outside the US — and full dollarization in some countries — suggests there is already demand for an internationally accepted medium of exchange and store of value.”
The US dollar serves as the world's reserve currency and is a way of grasping the finesse of cryptographic currencies. Pandl and Himmelber go on to acknowledge the potential of cryptocurrencies such as Bitcoin and the impact they could have on improving lives of unbanked populations. They anticipate huge growth and success in regions such as China and India where the population is generally growing dissatisfied with national monies. They conclude by stating that the digital coinage is “more consistent with a classic speculative bubble.”
This recognition could be insanely important for the fate of Bitcoin this year and in the future for one simple reason: Sachs officials occupy the highest positions in companies, conglomerates, banks and even government offices throughout the world. Also, Goldman Sachs employers have recently announced that they will be setting up their own crypto trading desk by mid-2018. Their voice is heard as far as possible and each word they utter and every act they undertake has huge consequences on the financial market.
Source:
“Goldman Sachs Recognizes Bitcoin's Future Potential”, Kelso Edward, news.bitcoin.com, January 11, 2018.