The $96 billion investment standard bank Goldman Sachs believes bitcoin is the new platinum, the premier store valuable in the global financing market.
In a survey sent to the bank's clients, Goldman Sachs expert Zach Pandl wrote that the rapid embrace demand for bitcoin has recently been triggered by the growing dissatisfaction with regulated budgetary systems and the current banking infrastructures.
In the long-term, as cryptocurrencies develop fully and evolve into a major asset class, Pandl noted that digital stock markets like bitcoin will cause lower returns but illustrate a high level of stability, like gold and other safe haven resources. He wrote:
"We should stress that, as money, cryptocurrencies must have low expected returns in the end, despite their high returns recently. Digital currencies should be thought of as low/zero come back or hedge-like assets, comparable to gold or certain other metals. "
However, Pandl also provided a negative viewpoint on the price trend of bitcoin and the exponential growth rate of the cryptocurrency market, sharing the sentiment of experts within the cryptocurrency market such as Ethereum creator Vitalik Buterin and co-founder Charles Hoskinson.
In December, Buterin stated:
"So total cryptocoin market limit just hit $0. 5 trillion today. But have we earned it? Just how many unbanked individuals have we banked? How much censorship-resistant commerce for the common individuals have we enabled? How many dapps have we created which have substantial usage? Low added value per user for by using a blockchain is decent, but then you have to make up for it in volume.
The answer for all of these questions is certainly not zero, and in some instances it's quite significant. But not enough to say it's $0. 5 trillion levels of significant. Too little. "
While the market valuation of several major cryptocurrencies like bitcoin and Ethereum could be justified given their large user bases and increasing user activity, the market valuation of other cryptocurrencies in the market can be questioned. In that sense, Pandl's description of the cryptocurrency market as a "classic speculative bubble" could also be rationalized.
But, as Goldman Sachs CEO Lloyd Blankfein discussed in an interview with CNBC, if bitcoin is the natural progression from fiat money or physical types of money to digital currencies, the industry valuation of bitcoin can be easily justified.
Blankfein emphasized that abolishment of the rare metal standard and the unexpected introduction of the redbull currency system had not been accepted and adopted by individuals and businesses to start with. Above time, the global economic system adapted to the fusca currency system and commenced utilizing it as the key form involving.
Bitcoin could lead to the natural progression from fiat foreign currencies to digital currencies, like the change from gold to the dollar. "You move slightly further and you get bitcoin that is not a fiat foreign currency so I don't trust, it and I no longer like it. However, if it works, I say maybe it was a natural progression from hard money to digital money, " said Blankfein.
