2018’s earliest days have seen some of Bitcoin’s most ardent critics about-face, and now investment bank Goldman Sachs has clarified that – given their use case in emerging markets – cryptocurrencies could ‘succeed’ as real money.
In a new report, company strategists wrote that “In recent decades the U.S. dollar has served its purpose relatively well… [however] in those countries and corners of the financial system where the traditional services of money are inadequately supplied, Bitcoin (and cryptocurrencies more generally) may offer viable alternatives.”
The company’s shift in opinion is mirrored by the quick adoption of cryptocurrencies around the world in nations with either developing economies or repressive governments.
Elsewhere, Venezuela has moved to issue the first 100 million units of its new Petrocurrency, while the Kim Jong-Un regime in North Korea has increased its hacking attempts on South Korean exchanges – with the view of acquiring cryptocurrencies – by more than three-fold.
Goldman Sachs strategists warned, however, that “Our working assumption is that long-run cryptocurrency returns should be equal to (or slightly below) growth in global real output—a number in the low single digits. Thus, digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.”
Goldman Sachs’ comments will likely come as welcome relief for beleaguered cryptocurrency investors, as South Korean financial authorities are reportedly moving to ban cryptocurrency investment within the nation, while other countries, such as Russia, are proceeding to issue a state-backed cryptocurrency.
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