Anthony Pompliano contends that Goldman Sachs‘ denial that the $2.5 trillion cryptocurrency market qualifies as an asset class is unrealistic, according to CoinGape.
TakeAway Points:
- An executive at Goldman Sachs declines to categorise cryptocurrencies as an “investment asset class.”
- According to Goldman Sachs, its institutional clients have little interest in Bitcoin or other cryptocurrencies.
- Anthony Pompliano criticises Goldman Sachs for their disconnection from the real world.
Crypto is not a Type of Investment Asset
Although some of the biggest names in Wall Street have jumped on the cryptocurrency bandwagon, Goldman Sachs, a major participant in finance, would rather look the other way around. The bank’s Wealth Management unit is chief investment officer, Sharmin Mossavar-Rahmani, expressed her disapproval of cryptocurrencies.
Sharmin has been a long-time critic of cryptocurrencies, and his stand remains the same despite the strong institutional demand for the asset class. In fact, she doesn’t consider crypto to be an investment asset class in the first place. In her interview with the Wall Street Journal, Sharmin said:
“We do not think it is an investment asset class. We’re not believers in crypto.”
On the other hand, Goldman Sachs competitors in traditional finance—BlackRock and Fidelity—have doubled down on their efforts after most clients showed interest in Bitcoin. However, Sharmin stated that there’s no such demand from the clients of Goldman Sachs.
She points out that one of the reasons she finds no merit in the asset is due to the challenge of accurately assessing its value.
“If you cannot determine its worth, how can you confidently take a bullish or bearish stance?” she questioned.
Furthermore, she criticized the industry, labeling it hypocritical. She highlighted the discrepancy between the industry’s advocacy for financial democratization and the reality of a few individuals wielding significant control over key decisions.
Crypto Maverick Assails Sachs Goldman Sachs
In his latest newsletter, popular Bitcoin investor and entrepreneur Anthony Pompliano lashed out at the Goldman Sachs executive for denying Bitcoin and crypto the status of ‘investment asset class’.
Pompliano underscored Bitcoin’s evolving role as the premier digital currency on the internet. He highlighted that a growing generation, accustomed to digital interactions and spending significant time online, views Bitcoin as the global internet reserve currency and default store-of-value.
Addressing concerns raised by others in the financial realm, Pompliano countered assertions that Bitcoin lacks investment potential. Despite scepticism from some quarters, he emphasized the significant inflow of funds into the $2.5 trillion cryptocurrency market, particularly from institutional investors, as indicative of its growing legitimacy as an asset class.
Furthermore, Pompliano refuted claims that cryptocurrencies primarily facilitate criminal activities. He cited data indicating that illicit transactions account for less than 0.5% of total cryptocurrency transactions, challenging misconceptions about the sector’s integrity compared to traditional fiat currencies.
Bitcoin Concerns and Assertions
Regarding volatility concerns and assertions of Bitcoin’s lack of inherent value, Pompliano offered a perspective shift. He noted that Bitcoin’s volatility primarily pertains to its exchange rate against fiat currencies like the US dollar, while its purchasing power has consistently increased compared to fiat over recent years.
This contrasted starkly with the declining purchasing power of traditional currencies, such as the US dollar, suggesting Bitcoin’s potential as a hedge against inflation and a store-of-value asset.
About
Goldman Sachs Group Inc., the largest financial services provider, is an investment bank with its headquarters located in New York and offers a wide range of services to a diverse clientele, including consumer banking, investment management, securities, and investment banking.
Governments, businesses, and individuals make up the firm’s clientele. Goldman Sachs was established in 1869 and is headquartered in New York. In all of the world’s principal financial centres, the financial services company has offices. After JP Morgan, Statista indicates that Goldman Sachs is the second-largest investment bank globally in terms of revenue.
