American multinational investment bank, Goldman Sachs in an upcoming conference call at 10:30 AM EDT will tell its clients to stay away from Bitcoin and cryptocurrencies, as these new-age investments do not qualify as an asset class.
The New York headquartered-bank reportedly issued that advice in its more than a week-long advertised call today May 27 entitled “US Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin.”
Digital Currency Group, CEO Barry Silbert who had reviewed a slide for the conference call noted a header representing the bank’s stance on cryptocurrencies which reads:
Cryptocurrencies Including Bitcoin Are Not an Asset Class.
Yet another section of the slide is quoted by Silbert to have revealed one of the reasons why Goldman Sachs is telling its customers to exclude Bitcoin and cryptocurrencies from their investment portfolio.
According to the slide, “[Goldman Sachs] believes that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients.”
Additionally, Goldman Sachs argued that Bitcoin doesn’t generate cash flow like bonds, remains highly volatile as evidenced by the March sell-off and that the cryptocurrency doesn’t show evidence of hedging against inflation as proponents claim.
Notably, the latest stance on Bitcoin by the Wall Street bank slightly differs from that of JP Morgan Chase. JP Morgan in recent times has softened its previously negative view of cryptocurrencies.
In February for instance, JP Morgan had said that although risky, crypto-assets including [Bitcoin] belong to an investor’s portfolio as a hedge “against a loss of confidence in both the domestic currency and the payments system.”
More recently, news broke that JP Morgan now offered its services to U.S-based crypto exchanges, Coinbase and Gemini, citing “regulatory compliance” by these companies as a core reason for opening its doors.