Crypto traders aren’t taking advice from Goldman Sachs — with Bitcoin up by more than 8% since the investment bank slammed BTC in an investors call. Bitcoin has increased from the $8,800 mark to $9530, with the $10,000 barrier in sight
According to crypto derivatives tracker Skew.com, the price rise has seen approximately $40 million in BitMEX shorts liquidated over the last 36 hours, with trading sitting above the BTC spot price indicating confidence in a longer rally. The 24 hour trading volume has stayed constant over the last week.
The rise may be related to recent news from another financial institution: Grayscale. Analysis of the Grayscale Bitcoin Trust reported yesterday, showed that it is buying Bitcoin at a rate equivalent to 150% of the new BTC created since the halving.
In the call Goldman Sachs argued Bitcoin lacks legitimacy, provides no cash flow, doesn’t provide diversification and hasn’t shown any evidence of being an inflation hedge. Bizarrely the bank said Bitcoin is not scarce, pointing to the Bitcoin forks as evidence. In response the crypto community largely ignored or laughed off the assessment.
Gemini Co-founder Cameron Winklevoss said the analysis was outdated criticism:
“Hey Goldman Sachs, 2014 just called and asked for their talking points back. Bitcoin was declared a commodity by the CFTC in 2015 in the Coinflip order…so yea it’s an asset whose price is set by supply and demand. Just like gold. Just like oil. It’s a commodity.”
Coinshares CSO Meltem Demirors took issue with Goldman Sachs’ criticism of Bitcoin being used for money laundering:
goldman sachs: admits guilt in jho lo / 1MDB scandal where $6.5B was laundered, pays one of the largest fines ever
also goldman sachs: bitcoin is bad because it has been used for money laundering which is also bad
y’all this is ? WILD ?
— Meltem Demirors (@Melt_Dem) May 27, 2020
They could still come around
It isn’t the first time Goldman Sachs have made strong calls with questionable logic. In 1994, the bank was bearish on the Internet — and look how that turned out.
The path Goldman Sachs appears to be following is the one taken by JP Morgan over the last couple of years. In 2017, JPM CEO Jamie Dimon said he would fire any employees caught trading BTC because it was both stupid and against company rules. The company has since embraced cryptocurrency, recently offering banking services to Coinbase and Gemini and its most recent Bitcoin analysis reported Bitcoin was undervalued by as much as 25%.
Source link Coin Telegraphs