Wall Street Cannot Decide About Bitcoin

The largest names in American Finance cannot agree on their perspective on Bitcoin!

Goldman Sachs recently hosted an online US economic outlook presentation. During this time, it was speculated they would talk about Bitcoin and other Cryptocurrencies. The bank made some interesting allegations, and this blog is going to serve as a investigation into how some of the largest financial firms are acting. Remember that one should watch what others do, and not what they say.

First up: Goldman Sachs

Below is a snapshot from their presentation on May 27th 2020. Just going to break it down point by point with my perception and understanding of the crypto market.

  • This shows the poor lack of education and research completed by Goldman in my opinion. Saying that bonds generate cash flow at a standard far and above crypto is like saying that you make money when your price rounds from $1.02 to $1.
  • Their analysis failed to include opportunities like mining cryptocurrency, staking crypto, and/or decentralized finance.
    • Yes, these might have a tangible cost to generate cash flow, but blanket statement "Does not generate cash flow like bonds" is not accurate whatsoever.
  • The firm also failed to provide a concrete measure that was used for "global economic growth". How can you measure the efficacy of something without knowing the units at which to measure with?
    • Cryptocurrency is volatile. In the same day that it dropped 37%, the Dow lost almost 2000 points and SPX dropped 200. This feels like an argument made in 2016.
    • No evidence to support hedging of inflation.. Consider the rapid expansion of monetary supply. Since 2008, we have increased the monetary supply five times. That does not come without the cost bared by the consumer.

    Jamie Dimon Flips His Bias..

    JP Morgan Chase has been led by their fearless CEO Jamie Dimon for a while now. In an infamous interview in 2017, the CEO called Bitcoin a fraud and would fire any trader known to be trading crypto. At the time, this was a hot talking point!

    Fast forward to 2020, and JP Morgan is providing financial banking services to not only Coinbase, but also Gemini - two of the largest names in Cryptocurrency.

    Rewind to 2019 when JP Morgan announced a patented internal digital currency. Although used to settle internal contracts and payments, CEO Jamie Dimon was quoted asking the token "could be internal, could be commercial, it could one day be consumer".

    What about Bloomberg?

    Ex presidential candidate Mike Bloomberg made an interesting proposal back in Feb 2020 to outline and clarify the cryptocurrency regulatory framework currently in place..

    Recognize that this does not mean that he is 'bullish' on crypto. However, this at face value shows he understands the short comings and what changes need to be made to protect the consumer and investor alike. 

    Jones.. Tudor Jones.

    History cannot lie! Paul Tudor Jones is one of the most successful, and profitable hedge fund managers. In a recent interview it came to light that he has a single digit % held in Bitcoin futures. It is his belief that it is a hedge to global inflation, and compares this opportunity to gold in the 1970s.

    Gray Scale:

    Here is an interesting figure I wanted to share from an independent analyst called Kevin Rooke who has taken a closer look at Gray Scale Investments recent purchases, within the context of post halving era BTC..

    Now this isn't too out to lunch because this is a digital asset investment firm, but the fact that they have accumulated more Bitcoin post halving then have been created SINCE halving is astounding.

    Key Takeaway:

    We live in the age of smoke and mirrors. People will say one thing and do the opposite. Very few people other than yourself always have your best interest at heart. Recognize that, and you'll get a different perspective looking out into the world. You need to take steps to protect and expand your wealth. Don't listen to what one "reputable" person has to say, you need to integrate information from many sources to create your own opinion.

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