@GoldmanSachs:“Implications of Current Policies for Inflation, Gold and Bitcoin"

[hugeblack]

At the investor's invitation, the investment bank is holding a client call on “US Economic Outlook & “Implications of Current Policies for Inflation, Gold and Bitcoin.” Yes Bitcoin, you did not mistake me reading the phrase.

There is no further information about the contents of the call outside the headline and it may be intended to discuss how the current central bank policy and the risk of monetary inflation affect assets such as bitcoin and gold. Where the Federal Reserve printed more than $ 3 trillion through a mixture of quantitative easing and financial programs.


It's good to see a change in goldman's tone, quote a response from 2014:

By Currie’s reasoning, commodities become supplanted when a better commodity comes along, so, for him, the question is whether Bitcoin solves an economic problem that currently exists with gold.

“The short answer is no,” Currie writes. “Gold is not failing as a store of value as wood failed as a sources of energy in steam engines. Steam locomotives could go farther and faster on coal. But Bitcoin does not improve upon gold.”

Read more and source ---> https://www.forbes.com/sites/colinharper/2020/05/22/goldman-sachs-is-hosting-a-call-about-bitcoin-gold-and-inflation/#f7655bd1effa

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[fillippone]

It's a mantra I repeat many time: "It's not that Bitcoin needs Wall Street, it is Wall Street that needs Bitcoin".

So now, in 2020, after a whole decade spent in denial first, anger and then depression, they might have progressed on the Kubler Ross Grief Cyle towards bargaining and maybe acceptance.

Of course a bank is interested in Bitcoin. Forget Jamie Dimon, banks are struggling to use bitcoin as an uncorrelated and high volatility asset to spice up their portfolios.

And even if they don't think Bitcoin would be useful to themselves, they can sell a lot of bitcoin related products and services to their clients, simply profiting on fees and commission without taking directional exposure.
In Italy and Germany many neobanks (some sort of of banking startups) have already integrated bitcoin in their offerings, selling to clients custody and bai trading services.

So I do believe it is more than natural that GS is starting to "sell" bitcoin to their clients.

Banks need bitcoin not to die, to stay relevant in a system that can, for the first time in history, stay alive without them.

I will unleash some spies on mine to access that presentation.

[fillippone]

It's nice to note the U turn taken by the main host of this conference.
Apparently, back in the 2018 he had a very different approach to cryptocurrencies, and namely Bitcoin:


https://twitter.com/dogetoshi/status/1263849866524049408?s=21

This Statement was given by Sharmin Mossavar-Rahamani, CIO of the Private Wealth Management Group(Goldman Sachs) while having frappuccino at local Starbucks and fat fingering those $btc market buys on bitmex.

https://twitter.com/Cryptanzee/status/1025389953134542848?s=20


It will be interesting how she will Justify this change of mind, something I think she will be obliged to clarify during the conference.

[justdimin]

Of course all these big companies will soften on bitcoin and that was a given considering even a regular person could make a profit from it, so they wanted to make a profit for themselves. That is how business works, when they see something that others could use to profit and leave them, they will be very against it, after all it lowers their profits but it wasn't really a big deal just yet.

Now that its a bigger deal, they realized that they could not just keep discrediting bitcoin hoping that people will not leave, so what they did was join the wave and become a part of it as well. This way they could at least offer their customers bitcoin purchases and so forth as well and it would help them make even more profits instead of losing profits to begin with. Makes sense that the trajectory was something like this, we wouldn't have expected anything else.

[Upgrade00]

I came across a picture that depicts the change in stance within ~2 years

I can't verify the source or when it was created but it should have been sometime last week.
Bitcoin needs more adoption and discussions about it. I organya webinar on bitcoin and blockchain some weeks back and realized that a lot of people have the wrong idea about it, even through they know so little of it.

[hatshepsut93]

Honestly, we don't actually know the content of the call, so it's a bit of a stretch to say that Goldman Sachs made a 180 - they could easily be criticizing Bitcoin there, saying that it failed to act as a hedge against covid-caused market crash. But the fact that they talk about Bitcoin is already pretty surprising, I thought that they just don't care, but instead we see that they put it together in one group with gold and fiat. That, in my mind, is already quite remarkable.

[exstasie]

It's nice to note the U turn taken by the main host of this conference.
Apparently, back in the 2018 he had a very different approach to cryptocurrencies, and namely Bitcoin:

That report was more about price than anything else. They cited the 2017 mania and the need for the market to unwind given weak underlying fundamentals. As it turned out they were very right. BTC dropped from $7,500 to the $3,100s in the months that followed publication.

Despite the correctness of that August 2018 call, be wary if Goldman Sachs seems particularly bullish on BTC. Did anyone notice how Paul Tudor Jones hyping BTC marked the top? I will laugh so hard if BTC drops below $8K and confirms an interim bear market now.

Wall Street firms are always thinking two steps ahead. No matter what, they are talking their book and using public sentiment against retail investors.

[fillippone]

In case you missed, as I did on my first read, here is the link to register to the Webcast.

https://event.webcasts.com/viewer/event.jsp?ei=1323195&tp_key=71370c5805

From there it would be probably possible also to download slides.
I will try to smuggle all the possible material here, if not too heavilty digitally marked.

[Keiser Soze]

In case you missed, as I did on my first read, here is the link to register to the Webcast.

https://event.webcasts.com/viewer/event.jsp?ei=1323195&tp_key=71370c5805

From there it would be probably possible also to download slides.
I will try to smuggle all the possible material here, if not too heavilty digitally marked.

thanks for the link, its always amusing to see confident people do a u-turn without accepting any responsibility for their statements.

[hatshepsut93]

https://i.redd.it/4b1eoc9dnb151.jpg

Like I said it here earlier, they aren't bullish on Bitcoin, they used it as an opportunity to criticize it. And I think it's fine, if they don't want to trade it and suggest it to their clients, then they shouldn't force themselves to do so, Bitcoin is still a huge risk and institutional investors hate big risks and unpredictability. And it's not like true bitcoiners need validation from banks or something.

[exstasie]

https://i.redd.it/4b1eoc9dnb151.jpg

Like I said it here earlier, they aren't bullish on Bitcoin, they used it as an opportunity to criticize it.

Thanks for sharing that. Are there more slides available? All the Reddit threads I'm pulling up from searches are from several days ago.

It's actually nice to see they aren't too bullish on the fundamentals (bad for diversification, no evidence of inflation hedging) since I distrust their publicly available opinions, but I'm worried this slide is being taken out of context. I'm curious if they discuss more technical and price-related stuff.

Also curious what they had to say about gold and inflation.

[hatshepsut93]

Thanks for sharing that. Are there more slides available? All the Reddit threads I'm pulling up from searches are from several days ago.

It's actually nice to see they aren't too bullish on the fundamentals (bad for diversification, no evidence of inflation hedging) since I distrust their publicly available opinions, but I'm worried this slide is being taken out of context. I'm curious if they discuss more technical and price-related stuff.

Also curious what they had to say about gold and inflation.

Here's the full report - https://resources.goldman.com/content/dam/pwm/direct-links/isg-calls/client_call_materials_27May20.pdf?sa=n&rd=n

Got the link from Coindesk - https://www.coindesk.com/goldman-sachs-cryptocurrencies-are-not-an-asset-class

We do not recommend bitcoin on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum-oriented traders.

We should keep in mind that this report is centered around investment strategies in the times of covid-19 aftermath, and I think they are correct here - Bitcoin failed to act as short-term hedge, so investors should not view it as such, and instead base their decision to invest in it on either TA or long-term fundamentals of Bitcoin.

[fillippone]

I had the opportunity to listen to the audio and thought that a it would have been a value to share th actual content of the call, in addition to the slides.

First of all, here the link for the slides.

US Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin (15th in our COVID-19 Series)

Here instead a transcript of what has been said during the conference, only in the part relative to bitcoin.
Please notice that this took less than 5 minutes at the very end of the call (literally: the call lasted exactly 60 minutes and they started talking about bitcoin in minute 55).

What about bitcoin, initially bitcoin had been proposed as a currency and, on page 29, we show what are the requirements for a currency: it has to be a reasonable medium of exchange, it has to be a reasonable unit of account; it has to be a reasonable store of value. Bitcoin does not offer any of that, none of the cryptocurrencies do.  And so people have moved from bitcoin being suggested as a digital currency to being an asset class. We don't believe that cryptocurrencies, including bitcoin, are appropriate as an asset class. Let’s look at page 30 to see why that the case.

First, it doesn’t  generate any cash-flow like bonds, or the cash-flows from equities that are  generated from their business, it is not generate any earning through exposure to Global economic growth, it doesn’t provide consistent diversification given very unstable correlations, it is doesn't dampen volatility given his historical volatility of 76%, compared equities to in the mid to high teens. On March 12 2020 the price of Bitcoin fell 37% in one day, and so we just want clients to actually see the kind of volatility we are talking about and there's no evidence, one way or another, whether it is inflation hedges because we haven't had much inflation since bitcoin was introduced.
 So, the thought that one wants to own something because somebody else will pay for it by buying it at a higher price, always relying on somebody else who want to pay for it is not a suitable investment, in our view, for our clients.

People have also quoted a lot of hedge funds saying they are going to be trading cryptocurrencies, and while something this volatile might be very appropriate for hedge funds and who wants to trade it because of the high volatility, that allure in our view does not s not constitute a viable investment rationale.
 We also want to make sure clients know that cryptocurrencies including bitcoin are not scarce commodities. There are many cryptocurrencies out there and even bitcoin has forked and we have not just regular bitcoin, but now we have bitcoin cash and bitcoin SV.

On page 32 we highlighted how these cryptocurrency has been used for very illicit activities from Ponzi schemes to money laundering, to Dark Net where people buy illicit goods to actually ransomware, and it's important just  to recognise that least what we've highlighted in red is from 2019, so this not old information, this is current information where people use cryptocurrencies to actually have ransomware attacks on let's say emergency responders and healthcare providers. Obviously, we intentionally highlighted those two, given the current state of the pandemic.
It is also important to recognise that there's a lot of hacking and inadvertent losses with digital wallets, all kind of issues, and we've highlighted them on page 33..

Page 34 is probably one of the most interesting pages. We published this in early 2018, in our 2018 Outlook. What we see in exhibit one is NASDAQ, S&P 500 and TOPIX, TOPIX has different points of equity market bubbles, so 2000 example for the S&P and NASDAQ. We then move on to the middle one and we show the bitcoin in the context of the equity market bubbles as well as the prices for tulip bulbs in 1634 thru 1637, which was considered an extreme mania. So, tulip mania was the poster child for mania and then we show you where Bitcoin prices has gone, so clearly unreasonable pricing.  And then we show you on the 3rd exhibit where Ehter was relative to bitcoin, and Bitcoin ended being like a flatline.
 So the pricing here in our view is quite arbitrary and random and volatile.

[Last of the V8s]

This is fairly tame and repetitive stuff. A bit niggly on their part - they must have enjoyed screwing with us with their pre-announcements. It shows a bit of fear, but they have yet to fire off more than a few darts in our direction. Plenty of time yet therefore in which to accumulate before their rising panic pushes the price up beyond our means.

[exstasie]

This is fairly tame and repetitive stuff. A bit niggly on their part - they must have enjoyed screwing with us with their pre-announcements.

Yep, quite underwhelming now that I've seen the whole thing. Hacking, Ponzi schemes, ransomware, money laundering, darknet markets? This could have been written in 2013!

We should keep in mind that this report is centered around investment strategies in the times of covid-19 aftermath, and I think they are correct here - Bitcoin failed to act as short-term hedge, so investors should not view it as such, and instead base their decision to invest in it on either TA or long-term fundamentals of Bitcoin.

Nothing hedges a liquidity crisis.

The more interesting question is whether BTC acts as a hedge against inflation. Too early to judge if you ask me.

[bkbirge]

This is a case of cherry picking data to support a-priori conclusions. Smartest guy in the room logic.

[Hueristic]

Let me state this in the most deferential way possible.

Goldmann Ballsacks can suck my left fucking nut.

[Keiser Soze]

Thanks very much for sharing the information and resources.

These guys are such nincompoops, as @bkbirge stated, cherry picking data to support a foregone conclusion they've already made before they began to populate Slide 1.

To keep things in perspective, they should compare the numbers for Ponzi schemes with those that run on Wall St, similarly should compare the $ values of money laundering via crypto to that conducted by the banking industry (maybe to GS' own ML desk). Safe to say - f*ck these nincompoops!

[Upgrade00]

Well, the content of the client call was quite disappointing especially for those in the Bitcoin community who were very much interested in the discussions. It appears to seem that their stance has not still changed on Bitcoin and cryptocurrency, and they're using very crude examples to support that stance.
While I was disappointed, the fact that after theses years they are still trying to slow the growth of cryptocurrency using their influence without success, is a plus to the Bitcoin network. When I last heard of their fud was in 2018, and at that time to now, Bitcoin has soared in price and adoption.

[fillippone]

For the moment this is the best Twitter reply to the call:

You are ahead of the curve if you learn why
- You should use log scale for BTC
- BCH/SV & other forks are NOT identical to BTC
- BTC is NOT a Ponzi
- Money laundering is NOT higher for BTC than USD
- Hacked exchange is NOT the same as hacked BTC
- BTC is NOT like 1637 tulip mania

https://twitter.com/100trillionUSD/status/1265703864872964108?s=20

Excately as @bkbirge stated, they conveyed a very cheap and lazy message. My guess is that they were sending a "message" to someone to reassure their stance on bitcoin. I cannot believe they genuinely believe in the crap their sold to their client. And I am referring also to the previous slides, not only the bitcoin-related ones.

EDIT: Second position:

Goldman Sachs: In 2019, $2.8 billion in Bitcoin was sent to currency exchanges from criminal entities.
Fun Fact: Goldman Sachs facilitated $6 billion in money laundering via 1MDB scandal between 2012-13.

https://twitter.com/tylerwinklevoss/status/1265705272678498305