Goldman Sachs Executives seem to believe that Bitcoin cannot be a store of value based on certain arguments they presented to support their claim. One of the firm’s top heads, the head of investment strategy, criticized its position as a value store due to its volatile nature. Many executives from the firm had earlier spoken against the crypto’s position, some of which are the firm’s senior Chairman and the commodity research head.
The three individuals all agree that Bitcoin possesses some features that prevent it from being an effective hedge against inflation. Many investors reveal that the primary aim of holding the digital asset is to diversify their portfolio and keep it as a store of value. The investors’ assertion, according to the executive, remains untrue.
The executive does not see Bitcoin as a store of value
As Bitcoin’s value continues to grow, primarily as it records new investors over time, this makes it behave similarly to gold. The digital asset has some common features with gold, such as scarcity and movability. Its scarce nature makes people see it as an investment because it appreciates with growing demand.
While many individuals conclude that the asset appreciates over time, many experts have differing opinions on their analysis, including Anthony Scaramucci’s conclusion on Bitcoin. The Skybridge executive debunked the rumors associated with holding a digital asset investment, and he concluded that investing in Bitcoin is safe as investing in gold and bonds.
Not many people agree with Scaramucci’s analysis on Bitcoin. One of those who have a different opinion is Goldman Sachs’s Sharmin Mossavar-Rahamani, who currently heads the investment strategy group. Rahamani claims that the digital asset’s volatility stops it from attaining the store of value position. She added that because many people are entering into the platform does not guarantee it as a value store.
Mossavar-Rahamani asserts that Bitcoin is not a medium of exchange
The executive had spoken on the rapid price changes Bitcoin now encounters, linked to GameStop’s decline after Robinhood halted the trading. The expert believes that its volatility stands in its way from being an effective exchange medium. She explained that the asset’s 80% long-term volatility makes it hard for it to be a medium due to unexpected rate changes. Similarly, the head of investment-strategy is not a fan of the yellow metal too.
Due to gold’s underperformance in 2020, she warned people against gold investments unless they believed that it would face debasing. Rahamani concluded by clarifying that Goldman Sachs doesn’t share that belief. The firm has many crypto critics who are not afraid to point out the asset’s inadequacy in some areas. Another executive, Jeff Curie, had mentioned that the asset’s price fluctuations make it unreliable. Many crypto investors often criticize the crypto for its volatility, especially when the asset corrects.
She also clarified that Blockchain technology would stay for an extended period to improve the industry. Rahamani asks Blockchain because she believes it would pave opportunities for better asset flows, while cryptocurrencies currently face some challenges.
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