When Bitcoin went on its price binge last year, enthusiasts were happy that the somewhat unknown world of crypto was finally coming into the light. However, as Bitcoin in particularly began to reach record heights, so did the criticism.
The infamous comments by Jamie Dimon dominated headlines, but other big names also had their piece to say, Goldman Sachs being one of them. The CEO of the US-based investment bank, Lloyd Blankfein, previously had this to say:
“Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”
Another infamous tidbit:
“When do I have to have a Bitcoin strategy? Not today. Life must be really rosy if that is what we are talking about. Bitcoin is not for me. A lot of things that have not been for me in the past 20 years have worked out, but I am not guessing that this will work out.”
Oh, how the tide has turned! Strategists for the firm now say:
“In recent decades, the US dollar has served its purpose relatively well. [But] in those countries and corners of the financial system where the traditional services of money are inadequately supplied, Bitcoin (and cryptocurrencies more generally) may offer viable alternatives.”
However, the firm still does not refer to cryptos as actual currency:
“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. Thus, digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.”
On the surface, this appears to be just another well-established name changing their mind about cryptocurrencies, but it could mean more. Goldman Sachs has previously been referred to as a controlling force in the global economic sector, which means that their opinion matters to the rest of the financial world.
Some news publications have even referred to a close relationship between the firm and the US government, with past associates of the former currently working for the latter.
Cryptocurrency have been steadily gaining a reputation as being the chosen medium of exchange for citizens in developing countries. This could be for a range of reasons including unstable political climates, and economies suffering from hyperinflation. It also acts as a circumvention tool for countries currently exposed to financial sanctions.