Goldman Sachs’ 2018 Market Outlook: The Ups and Downs
A July 2018 report from the Goldman Sachs Investment Strategy Group, titled (Un)Steady as She Goes, highlighted some looming shadows over the market landscape, one of which was the notorious cryptocurrency mania.
Cryptocurrency: The Troubled Child of Modern Finance
Goldman Sachs didn’t mince words when addressing cryptocurrencies. They projected that the crypto markets are likely to face a downturn in the future. Why? Because, much to the chagrin of crypto enthusiasts, they argued that cryptocurrencies fail to fulfill the basic roles of currency as we know it:
- Medium of exchange
- Unit of measurement
- Store of value
This statement is enough to make any Bitcoin holder clutch their pearls.
Market Predictions: The Ripple Effect of Cryptocurrency Decline
Despite the gloomy forecast for cryptocurrencies, Goldman Sachs reassured investors that such declines would not greatly affect the performance of broader financial assets. After all, cryptocurrencies represented merely 0.3% of world GDP at that time. Phew! It looks like the rest of us can breathe easy—unless you’ve invested your life savings in a digital coin. Then, well, good luck!
The Bubble or Not to Bubble Debate
In an earlier report from January 2018, the group expressed their unease about the escalating prices of Bitcoin, suggesting that it had entered bubble territory. By watching the meteoric rise of Bitcoin’s price, they seemed ready to alert the authorities, waving red flags to signal potential disaster.
Can Crypto Win Over Wall Street? A Glimmer of Hope
Despite Goldman Sachs’ skepticism, there are signs of a potential softening stance. In a more optimistic view, CEO Lloyd Blankfein entertained the idea that cryptocurrency adoption could mimic history’s transition from gold coins to paper money. His argument? Just because something is uncomfortable doesn’t mean it won’t happen.
Furthermore, COO David Solomon announced that the firm is exploring crypto trading derivatives, indicating a willingness to evolve and adapt to the rapidly changing environment. Gone are the days of steadfast resistance—Goldman Sachs is ready to dip its toes into the crypto waters!
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