What does Goldman Sachs tell us about Bitcoin?

Cryptoland and Wall Street are two very different universes. The difference is from heaven to earth. Cryptoland is a young, irreverent and crazy universe. Wall Street is a much more sophisticated, pragmatic and old universe. In many ways, you could say that Wall Street is much more obtuse than Cryptoland. Sometimes much more closed. But Cryptoland is a much more naive and delusional environment. Therefore, many more manipulable. Much more “scam”. On Wall Street, there are teams in large offices conducting detailed studies of potential hard-data opportunities. In Cryptoland, an influencer writes “To the moon” on Twitter and that’s enough. What does Goldman Sachs tell us about Bitcoin?

By “Goldman Sachs,” we mean a particular team or person, within Goldman Sachs, who is speaking to their clients at any given time. That detail is very relevant, because not everyone at Goldman Sachs has the same opinions or the same specialties. What the CEO says in an informal interview is not necessarily the same as what the official report of a specialist analyst might say. On the other hand, analysts are also wrong. Obviously they don’t know the future. And the probable is not always what we get. In many cases, there is a bias or interest on the part of the bank that is confused with the official recommendation. And, in many cases, the client ignores the recommendation given. Thus, what Goldman Sachs says about something must be read very carefully, but very cautiously. It is not sacred truth.

Read on: The Fed Will Be More Aggressive: What Does This Mean For Bitcoin Price?

A little comment on the press. This morning I read on Bloomberg: “Only 5% of JPMorgan clients see Bitcoin at $ 100K in 2022.” Then I read the same news, but in Diario Bitcoin: “55% of JPMorgan bank customers believe that Bitcoin will be worth more than USD 60,000 in 2022”. Most people only read the headlines. They don’t read the news in detail. And, of course, only a small minority read the original report that created the news. Bloomberg is Wall Street and the tone of the news is one of almost pessimistic caution. Daily Bitcoin is Cryptoland (as is Cointelegraph) and the tone of the news is optimism and hope. The original report is mixed. Sober, balanced, and sensible. Note that here I am not talking about conspiracy theories against the “evil press.” It is a simple call to be better readers. Read different media. Read the source of the news. And draw your conclusions with your own criteria.

David Kostin, Chief US Equity Strategist at Goldman Sachs, sees a difficult year for the tech sector. The valuation of the sector is seven times the sales. That is, there are no fundamentals to justify current prices in the tech sector. The market justifies such valuations due to future sales projections. What is commonly known as the growth valuation to make the difference from the value valuation (fundamental analysis). In more prosaic words: The growth sector is almost all speculation.

Why so much speculation? The market speculates because it can. In other words, speculation is a consequence of free money. In other words, an extremely flexible monetary policy. Which automatically implies that tough monetary policy hits the most speculative markets first. I reserve my right to use the term “speculative” in a non-pejorative sense. Speculating is betting on the future with assumptions. If we buy something because we think it will go up in price in the future, we are speculating.

Keep reading: Predictions and trends: What will 2022 be like?

Bitcoin is an essentially speculative market. If the term “speculative” offends you, then let’s play with euphemisms to avoid breaking a glass. Bitcoin is a “store of value”. Basically, it is an exchange rate. And the investor buys today expecting a better price in the future. However, a better price is only possible with a big dollar. A market is a pair. And the pair has two parts. Shortage of supply and abundance of demand translates into an increase in price. Rather, an increase in the rate.

Zach Pandl, an analyst at Goldman Sachs and co-head of the Global FX and EM strategy, tells clients that Bitcoin only has 20% of the “store of value” market. And, according to their research, this proportion could grow significantly in the future. When Bitcoin reaches 50% of this market, the price per unit could be located at USD 100K. The key word is “possibility.” Here the planned period is 5 years. Here is the detail: “Bitcoin shows sensitivity to macroeconomic factors”, Zach Pandl said in an interview for the Bloomberg Network. Pandl: “Bitcoin is a macro asset in a phase of social adoption.”

Goldman Sachs recently restored its Cryptocurrency Trading Desk. The team will work within the Global Markets division. That categorization is extremely revealing. Bitcoin is practically treated as a commodity / currency. Regulation, custodial services, and derivatives are obviously hugely important issues.

Meanwhile in Cryptoland, the same news was covered somewhat differently. “Bitcoin will replace gold according to Goldman Sachs.” In Cryptoland, everything is covered in a libertarian, rebellious, and revolutionary tone. The rise of Bitcoin is important. But it seems that the destruction of the enemy is just as important. Bitcoin’s victory always joins the eventual collapse of the dollar and gold in the context of a people’s libertarian revolution. Live the cause!

Keep reading: How to invest in 2022?

I must admit that libertarian politics tires me. It avoided as much as possible the ideological fights that form between the different postmodern tribes. I am an investor. And my goal is the growth of my portfolio. He does not seek identity as a hobby. I’m not looking to be part of a tribe on Twitter. Now, to be a good investor, I need quality information. The recommendation is as follows: Educate yourself. In Cryptoland, there is a lot of garbage. Twitter is a trap. And the analyzes tend to be very superficial. Taking care of your money should be your priority.

“To the moon” is not an analysis. “Bitcoin fix that” is not an analysis. In many cases, the “influencer” who talks so hard on Twitter just wants to increase followers in order to sell their course. So it tells you what you want to hear. It relies on catchy phrases to grab your attention, but not all that glitters is gold. When the CEO of an exchange says that Bitcoin is going “to moon,” your business may depend on keeping the excitement alive. In short, you have to be more demanding with the information. And do not rule out what Wall Street says about Bitcoin.

Source link

About Admin

Check Also

‘It’s time to get richer’

The author of the bestseller “Rich Dad, Poor Dad”, Robert Kiyosaki, took to Twitter on …

Leave a Reply

Your email address will not be published. Required fields are marked *