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Leaked documents show what Goldman Sachs really thinks of Bitcoin

May 27, 2020, 10:30 PM UTC

News that Goldman Sachs would be briefing clients about Bitcoin set the cryptocurrency world abuzz on Wednesday morning. Would the famous investment bank deliver a seal of approval to digital currency? Would the briefing cause the price of Bitcoin to soar?

Alas, for crypto fans, the answer came as a resounding no when slides of Goldman’s presentation, dryly titled “US Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin,” leaked on social media.

One slide offered the withering perspective that cryptocurrencies like Bitcoin are not even an asset class in the first place, and that they offer neither cash flow nor a hedge against inflation.

“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,” the slide concluded.

That wasn’t the worst of it. A follow-up slide suggested the other most notable feature of cryptocurrency is as a “conduit for illegal activity,” including Ponzi schemes and ransomware, while another invoked the Dutch tulip mania. Ouch.

Not surprisingly, Bitcoin’s many ardent fans on Twitter lashed out at Goldman Sachs. These included Tyler and Cameron Winklevoss, the twins who gained fame for their legal tussles with Mark Zuckerberg before becoming Bitcoin billionaires. They jabbed the bank over its alleged ignorance and hypocrisy about cryptocurrency:

Meanwhile, Ryan Selkis, the CEO of crypto research firm Messari, revived Goldman’s “vampire squid” moniker to compare the bank’s performance to Bitcoin.

And Neeraj Agrawal of the industry group Coin Center couldn’t resist reminding the bank of its 2018 flirtation with building a crypto trading desk—and the questionable hairstyles of its would-be Bitcoin executives.

A spokesperson for Goldman Sachs declined to comment on the Twitter contretemps, saying, “I’m not sure there’s much to add.”

In the bigger picture, Wednesday’s dustup is likely to become just another footnote in the long-running feud between Bitcoin boosters and the traditional financial establishment—a feud that has seen Warren Buffett tar Bitcoin as “rat poison squared” and JPMorgan CEO Jamie Dimon declare it a “fraud.”

Despite the social media melodrama, however, there are signs the two worlds are coming together. Earlier this month, the Wall Street Journal reported JPMorgan was taking on crypto giant Coinbase as a banking client while, on Wednesday, Coinbase announced it was acquiring a trading firm composed of traditional financial executives—including one from Goldman Sachs.

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