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Goldman Sachs Rubbishes Bitcoin, Says its Not Real Asset

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  • Goldman Sachs Rubbishes Bitcoin, Says its Not Real Asset

Goldman Sachs, one of the world’s leading investment banks, has once again rubbished Bitcoin in a leaked report to clients.

The investment bank maintained its position that Bitcoin and other cryptocurrencies are not viable investment vehicles under the present economic environment

Goldman Sachs said, “Cryptocurrencies including bitcoin are not appropriate as an asset class.”

It explained that the volatile price movements of the cryptocurrencies remain unstable and does not correlate with other asset classes and lack clear evidence that it can serve as an inflation hedge as claimed by Bitcoin ardent fans.

“We believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients,” Goldman stated.

Sharmin Mossavar-Rahmani, the chief investment officer for wealth management at the bank, said “We also believe that while hedge funds may find trading cryptocurrencies appealing because of their high volatility, that allure does not constitute a viable investment rationale.”

However, cryptocurrency enthusiasts immediately took to Twitter to attack Goldman Sachs leaked report.

These include Tyler and Cameron Winklevoss, the twins that dragged Mark Zuckerberg to court before becoming Bitcoin billionaires.Bitcoin tweet

Meanwhile, Bitcoin remained above the $8,730 support levels after reports of certain Whales acquiring a combined 12,000 BTC became public. The dominant cryptocurrency rose to $9,180 per coin as at 4:16 am Nigerian time on Thursday.

BTCUSDDaily 2

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Cryptocurrency

Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue

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Bitcoin Rises to $11,050 Per Coin on Friday

Bitcoin rose above $11,000 per coin on Saturday after weeks of trading in a range, between $10,867 and $10,960 despite liquidity drying up across exchanges.

The cryptocurrency most dominant coin gained 1.67 percent to settle at $11,050 per coin as at 8.04 pm Nigerian time on Saturday.

“Markets are looking weak on drying-up liquidity on exchanges while BTC hardly managed to reach back above the $11,000 level and couldn’t sustain it,” said Jean Baptiste Pavageau, partner at trading firm ExoAlpha.

Indeed, major USD/BTC exchange volumes are looking feeble, with Friday tallying a $211 million total so far while daily averages the past month have been $364 million.

Rupert Douglas, head of institutional sales at crypto brokerage Koine, said he is concerned that stock markets are about to start correction that could potentially hurt crypto as investors look to unload risky assets.

“I think equities are headed lower and if that happens digital assets will get sucked down, too,” Douglas told CoinDesk. “The tech shares are too frothy,” he added

Another factor crypto investors are tracking: Bitcoin dominance, a measure of its market capitalization as a percentage of total cryptocurrencies. September has seen bitcoin hit 2020 dominance lows, hovering around 60% Friday.

So far, bitcoin dominance has largely been sliding downwards since the beginning of 2020,” said Andrew Tu, an executive at crypto quant trading firm Efficient Frontier. “It will be interesting to see if we see a short-term reversion of the bitcoin dominance back upwards.

Pavageau of ExoAlpha explained that Decentralized Finance (DeFi) is captivating the crypto market, and that is causing decline in bitcoin.

The market is focused on DeFi. It seems that locking value is also draining liquidity from exchanges as traders are noticing higher slippage when executing in the market,” Pavageau said. “A question to ask might be: Is the total value locked a threat to market liquidity for active traders?

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Nigeria’s Securities and Exchange Commission Moves to Regulate Cryptocurrencies

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SEC Says Cryptocurrencies Are Assets Under its regulatory Jurisdiction

Nigeria’s Securities and Exchange Commission (SEC) said it will start regulating unregulated digital assets like Bitcoin and other cryptocurrencies.

The Commission made the statement on Monday in a publication released on its website.

It said the objective is not to hinder technology or stifle innovation but to create standards that encourage ethical practices and protect both investors and businesses offering digital assets as an investment vehicle.

The statement reads, “Since digital assets offerings provide alternative investment opportunities for the investing public, it is essential to ensure that these offerings operate in a manner that is consistent with investor protection, the interest of the public, market integrity and transparency.”

SEC said it has been conferred powers by section 13 of the Investment and Securities Act, 2007 to regulate investments and securities business in Nigeria.

It, therefore, stated that in line with these provisions, it has adopted a three-pronged objective to regulate market innovation, foster investment safety, deepen market provisions and provide solutions to investment problems.

It said, “Section 13 of the Investment and Securities Act, 2007 conferred powers on the commission as the apex regulator of the Nigerian capital market to regulate investments and securities business in Nigeria.

“In line with these powers, the SEC has adopted a three-pronged objective to regulate innovation, hinged on safety, market deepening and providing solution to problems. This will guide its strategy, its regulations and its interaction with innovators seeking legitimacy and relevance.

“Consequently, the SEC will regulate crypto-token or crypto-coin investments when the character of the investments qualifies as securities transactions.”

Accordingly, the commission explained that virtual assets are securities unless proven otherwise.

It said, “Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing.

“However, where the finding of the commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.

“The registration process for virtual assets will therefore involve a two-prong approach – an initial assessment filing to satisfy the burden of proof and a filing for registration proper, either made directly by the issuer or sponsor or where the burden of proof is not satisfied.

“Similarly, all digital assets token offering, initial coin offerings, security token ICOs and other Blockchain-based offers of digital assets within Nigeria or by Nigerian issuers or sponsors or foreign issuers targeting Nigerian investors, shall be subject to the regulation of the commission.”

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Paxful Expands Beyond Bitcoin, Adds Tether (USDT) to its Platform

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Global peer-to-peer bitcoin marketplace, Paxful, announced today the addition of Tether (USDT) to its platform. USDT belongs to a class of cryptocurrencies known as stablecoins.

A stablecoin is a type of cryptocurrency whose value reflects an existing fiat currency (e.g. US Dollars). The inclusion of USDT, the world’s largest stablecoin by market value, will assist users in combating a volatile market, protecting their assets, and expanding their portfolio.

The industry has seen a surging demand for a stable digital currency amidst fears of an economic recession in both traditional and digital markets. In the last 12 months, Tether has established itself as a champion amongst stablecoins, with a market capitalization of over $13 billion (https://bit.ly/3kdjoHk).

“We consider this a big step for us since this is the first cryptocurrency other than bitcoin we have on the platform,” said Ray Youssef, CEO, and co-founder of Paxful. “We always listen to our customers. We understand that some come to Paxful for wealth generation and turn to crypto for stability when their national currency is affected by inflation. We hope that this can aid them to be more in control of their finances.”

The addition comes with a hedging option, allowing users to instantly convert BTC to USDT and vice versa, helping the users protect their funds during bitcoin price fluctuations.

The company also plans to enable USDT trading on the platform. Same as with the bitcoin (BTC) trading in the Paxful marketplace, users can buy and sell USDT with over 300 payment methods. The USDT balance is accessible via the wallet page, where the current market price for both coins is displayed. The launch of this feature marks Paxful’s first step towards potentially adding new cryptocurrencies in the future.

The company recently announced that the platform Paxful has hit 4.5 million registered wallets, reached 4.6 billion USD in trading volume, and reduced dispute levels to under 1%. Since inception, they have added 1 million users per year and so far in 2020 and are on track to sign up an additional 2 million users by the end of the year.

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