The Chief Investment Officer of Goldman Sachs Investment Strategy Group Sharmin Mossavar-Rahmani tagged bitcoin as an unsteady currency, predicting that the community should expect more decline, even below $6,000 mark despite its rise to the tune of $20,000 last year. His opinion of Bitcoin is aligned with the view of the economist that questions the validity of Bitcoin as a means of transaction.
Goldman Sach Prediction of Bitcoin
This announcement was as disclosed in a mid-year update to its 2018 edition of the Outlook, titled “(Un)Steady as She Goes.”
In his own words, Mossavar went on to say,
“[further] declines will not negatively impact the performance of broader financial assets because cryptocurrencies represent just 0.3% of world GDP as of mid-201…[in fact], we believe that they garner far more traditional media and social media attention than is warranted.”
The reasons for the prediction of continuation of current decline is same with traditional economists who have opposed Cryptocurrency, who mostly see Bitcoin as a thing that “does not fulfill any of the three traditional roles of a currency: [it is] neither a medium of exchange, nor a unit of measurement, nor a store of value.”
Despite Mossavar’s opinion about the view of traditional economists, Bitcoin has continued to grow stronger in the face of a similar objection of cryptocurrencies. As the FUD spread by this view, various institutions have continued to make the virtual currencies wax stronger.
The Determining Factor of Bitcoin’s Value
As usual over time, crypto enthusiasts will argue back against this thought stating that bitcoin is qualified to be a real means of exchange, as opined Saifedean Ammous. However, if the volume of cryptocurrency in the world Gel is 0.3%, then what is fuelling the tendency of its rise, and it speculation? What has stimulated its bullish trend to it highest in 2017, despite the high level of pessimists of it at its evolvement?
The growth in value can be attributed to public sentiments and technological advances. However, it must be considered that the very same system that sees no value and importance in Bitcoin has continued to be the reason for its rise and explosion.
Just as it is in a risk-on asset class, easy monetary policies inflate prices considerably. This can be said to be similar with Bitcoin where the boom in traditional asset prices can lead to the continued price inflation in the cryptocurrency market.
The Cryptocurrency Hypocrisy
The opinion of most large financial institutions has manipulated investor sentiment on cryptocurrency, while they have a hidden interest or stake in cryptos. Such as Jamie Dimon of JPMorgan Chase funding Bitcoin into a short-term decline while allowing parts of his firm to offer it to consumers, so also is Elon Musk’s Tesla (TSLA) funding.
The trend that Bitcoin and cryptocurrencies at large will take is just a two-way thing, which is either the bullish move according to its enthusiasts or the bearish according to the pessimists. But the determining factor of where the future will be is the acceptance and integration by the system that is rejecting it.
As expected the Bitcoin ETF will bring a massive boost from the same traditional system. Another is the large players such as Goldman (via Circle), and Microsoft (partnering with ICE) are moving into the crypto space making the infrastructure and the necessary aid that will continue its growth.
