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The banking world and the crypto world have been feuding for some time. The banking world tends to view Bitcoin from a negative perspective. They also discourage their clients from taking up the coin. 

The feud has seen top financial expert Warren Buffet refer to Bitcoin as "rat poison squared." JP Morgan CEO, Jamie Dimon, also once said Bitcoin is all a fraud. Goldman Sach took this feud even higher when it released a report detailing why Bitcoin is not an asset. 

The report detailed how the bank views the coin. It also went ahead to discourage its clients from investing in the crypto world. 

Bitcoin is Not an Asset 

The bank tore into Bitcoin's viability as an asset. It provided an in-depth analysis discrediting the coin in a presentation titled, "Cryptocurrencies Including Bitcoin Are Not an Asset Class."

It claimed the coin does not support cash flow through global exposure. It also comes with limited diversification. It also looked into its volatility and being less effective as a hedge against inflation. 

These reasons were a way for the bank to sway their clients from investing in the coin. It claimed Bitcoin's value is dependent on how much one is willing to pay. The volatility makes it a poor choice of investment.

The bank still went on Bitcoin's use for crimes. The lesser regulations on the currency make it viable for financial crimes. Most of the crypto opposers have used that against it. Goldman Sachs took advantage of the same.

It claimed the coin is an enabler of illicit activities and money laundering. 

The bank also dismissed the claims of Bitcoin to be a haven for safer investments. 
Most of the Bitcoin lovers compare it to gold. They claim while it does not offer dividends or discounts, it is as scarce as gold. Now that gold derives its value from scarcity, Bitcoin deserves a similar claim. 

The bank's analysis was not having any of the scarcity claims. While it acknowledges the Bitcoin's limit of 21million coins, it looked into the possibility of deriving newer coins. It sited examples of the Bitcoin Cash and Bitcoin SV as the folks of Bitcoin.

It means creating a new coin from Bitcoin only needs a change of the network protocol. That it only takes a few clicks on buttons to increase the abundance of the coin. 

The attack never stopped at Bitcoin. The investment firm also dismissed gold as an investment against inflation. It claimed gold does not have any correlation with inflation. It has only outperformed inflation in a few instances before.

And that was in cases of lower rate changes. It thus concluded that gold offers no protection to the clients. 

Bitcoin Community Rebuttal 

The report by Goldman caught the Bitcoin community unawares. Goldman had been one of the earliest Bitcoin supporters. It had once given a detailed analysis of why Bitcoin is money. It had also predicted the coin's adoption into the mainstream in early 2018. 

However, it all changed with the Bitcoin's plunge. The bank executives started giving differing assessments of the coin. An executive claimed the declines would persist. They went on to claim the coin might, after all, not succeed as a form of currency. 

With the coin experiencing a bullish run in recent times, the Bitcoin community expected better news.  The timing indicated a more upbeat report as Bitcoin had outperformed over the Coronavirus period.

Most of the enthusiasts felt maybe the bank was to give a case to invest in Bitcoin. It was, therefore, all disappointment when the team released the report. And the Bitcoin community, as expected, is not having any of it.

Cameron Winklevoss, the co-founder of Gemini, a crypto exchange, was one of the people to react. He gave a backlash on the bank's assessment. He believed the claims were outdated; they could only fit 2004.

He claimed in a tweet that Bitcoin is an asset like any other. The coin was declared an asset in 2015 by CFTC. And that it is like gold, oil or any other commodity. 

Tyler Winklevoss, on the other hand, read malice on the report. He thought it was probably reverse psychology with other motives. That it was most probably a tactic to throw people off balance while they take up other options. 

Meltem Demirors, Chief Strategy Coinshares, also had her view on the same.  She questioned Goldman's suitability to call out Bitcoin for money laundering claims. 
She relied on the money laundering case involving the bank. The 1MDB case forced the bank to pay a $3.9billion settlement. 

Some quarters also believed the report was a case of taking away Bitcoin's development over the bank. Ryan Selkis, CEO of Messari, a crypto research firm, pointed it out. He claimed the coin had gained 2.5x market cap of the bank in the past two years. 

Generally, the crypto world feels Goldman is not sincere in its assessments of the coin. Most believe the bank is denying its clients the opportunity to have a piece of one of the best investments in recent times. 

Goldman Sachs' Competitors Warming Up to Bitcoin

While it might seem the Goldman vs Bitcoin feud is an indication of the current state between banking and Bitcoin, the two worlds seem to be drawing closer. The traditional banking system is fast opening up to the crypto world. This is evident when JP Morgan took in Coinbase and Gemini as the first crypto exchange clients. 

Coinbase has announced it is taking up a trading firm with traditional finance executives. Jamie Dimon has also redacted his reference to Bitcoin as a fraud. That he regrets ever saying that. 

Therefore, while Goldman and Bitcoin keep feuding, there is only one way to go for the financial world. Both of the worlds must learn to coexist. Crypto use has been rising in recent times. Bitcoin is already accepted in Wall Street. 

Bitcoin is already traded in several exchanges as a commodity. The earlier both worlds learn to coexist, the more they would prosper.  

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