June 3, 2020 / banks

Why Do Bankers Recommend Never Buy Bitcoin

bitcoin bank

Goldman Sachs found or came up with some recommendations on why cryptocurrencies cannot be considered assets. 

  • The first reason is that Bitcoin does not generate cash flows, as bonds do. At the same time, one of the Winklevoss twins already answered this question perfectly:

It seems, that Goldman Sachs worries that cash flows in BTC pass by banks.

  • The second reason: Bitcoin does not affect GDP growth, thereby not generating income for the global economy. Besides, a lot of electricity is spent on mining Bitcoin.

When critics of Bitcoin recall how much electricity miners spend on mining, they forget to say that there is now an overproduction of electricity in the world. You can, of course, either close unnecessary power plants and lay off workers, or let night-time lighting work around the clock, just to spend electricity. And you can mine BTC and give the energy sector income – let everyone choose for himself.

  • The lack of a stable correlation with other assets is the third minus Bitcoin.

Today, the economy is in a very bad state, but the stock market keeps growing thanks to the pumping of Central Banks fiat. At the same time, gold is also growing, because not everyone believes that central banks will be able to drag, and the stock market will not fall again.

  • Goldman Sachs analysts are particularly worried by the fact that on March 12, Bitcoin fell about 37%.

For some reason, they forget to add that on the same day both the stock market and gold fell down sharply. And for some reason, they don’t tell anything for the recent price of oil which is trading at $ 37 per barrel. Also, how would very high volatility?

We have to say that such events are an exception to the rule for traditional markets, and trading there usually goes in a much calmer course than on cryptocurrency exchanges.

  • Bitcoin is not a hedge asset.

There is a problem because the sphere of deals for BTC is still quite small and in most cases, we need to convert it to fiat. And the faster fiat becomes cheaper, the less you can buy for Bitcoin. To overtake this inflation, cryptocurrency must grow in price faster than dollars are depreciating, and so far we are fully coping with this task.

We also already have examples of how in Venezuela, Argentina, and Turkey. The demand for BTC increased sharply as a means of protection against inflation in the fall of national currencies in these countries. As for Bitcoin inflation itself, it is less than 2% per year after halving on May 11. Despite the fact that the global inflation rate is 3.5:

Resume

As for Goldman Sachs, is it strange that the organization does not advise its customers to get rid of dollars? The world’s leading banks are constantly featured in money laundering scandals, they pay billions of dollars in fines for this and continue to work, and Goldman Sachs is no exception.

Why are they just not closed for something like that? Maybe because all these fines are such a pullback. He made money on illegal transactions, sent a part of the amount to the treasury in the form of a fine, and continue to work on. At the same time, Bitcoin is a bad thing and banks and dollars are good ones.

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