I read this earlier this month, and was surprised that an investment bank of that magnitude would even feel the need to mention cryptocurrencies in any way, shape or form. While this is something I have been mentioning on here for going on a year now:
"We also believe that cryptocurrencies have moved beyond bubble levels in financial markets..."
I also found this point rather interesting on the relative scale of cryptocurrencies as a whole:
"At the peak of the dot-com bubble in March 2000, the combined market capitalization of NASDAQ and S&P 500 information technology stocks was 101% of the US GDP and 31% of the world GDP. The aggregate market capitalization of cryptocurrencies is 3.2% of the US GDP and 0.8% of the world GDP."
Note that the report was published before the massive plunge a couple weeks back that wiped out a good 30% of the cryptocurrency overall market cap and sent coins like Ripple plummeting well over 50%.
They make a solid point regarding price spikes and surges in real-world, tangible companies who announce affiliations with blockchain based entities simply as a way to increase stock price (Croe Inc, Long BLockchain Corp. in the Outlook piece, page 38).
And everything they mention here is spot on:
"In late 2017, the price discrepancies among 17 US exchanges for one bitcoin amounted to $4,156, or about a 31% difference between high and low prices. Transaction costs have skyrocketed, and frequent hacking has wiped out entire wallets and exchanges of their bitcoin holdings."
Between events such as the above leading regulators to want to push more into the cryptocurrency territory, and news such as https://www.cnbc.com/2018/01/22/bitcoin-tanks-more-than-10-percent-to-start-week-to-below-11000-again.html, I see a strong push towards more centralized currencies who are willing and able to team up with government entities being preferred over their decentralized counterparts.
It's clearly going to be a turbulent 2018 for the crypto world. The fact that Goldman Sachs spends several pages of their annual outlook report going over this is a good enough indicator that it has reached proportions where large-scale investors want answers to their questions on it.
Whether their questions have been more aligned with "Why aren't we investing more into cryptocurrencies?" or "These unstable currencies aren't going to affect our bottom line in a negative way are they?" remains to be seen.
Thanks for putting this up,
@Sephrata. I'm sure it will receive the typical blind scrutiny from both sides of the coin, but in a largely pro-crypto landscape, it's good to see where the other side is pulling their information from, and analyzing the facts and figures to determine how things such as this paper affect things overall.
But again, there is always the argument that Goldman Sachs and other investment banks such as JP Morgan have their strong anti-crypto bias in everything they touch. I'd love to see something similar in opposition, with pro-crypto findings, citing sources that aren't biased towards cryptocurrencies being the "future of currency". So far, it's been almost exclusively "this source says so, and they are even starting their own coin" or "here is an article from someone who is a strong blockchain enthusiast and has a lot of holdings in the following coins".
I'll be even more interested if cryptocurrencies are mentioned in the BH Annual Report for 2017...
