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Goldman Sachs Further Embraces Bitcoin as David Solomon Named New CEO

  • Alex Morris
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    A new crypto-friendly CEO is expected to take over Goldman Sachs this October


Goldman Sachs Further Embraces Bitcoin as David Solomon Named New CEO
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Goldman Sachs stirs up some buzz in the crypto world by confirming an appointment of a new CEO David Solomon. Unlike the majority of prominent figures in New York’s financial ecosystem, David Solomon is famous for his pro-crypto stance. He is expected to replace the incumbent chief executive Lloyd Blankfein in October.

Judgment of Solomon

In the recently published Bloomberg interview, Solomon emphasizes the importance of adaptation to the current market needs. Goldman Sachs already features some derivatives that can be traded against Bitcoin in the nearest future and may it in the list of digital assets due to a high demand. Moreover, the bank will start using its own funds to trade to trade BTC on behalf of clients in a couple of weeks.

Solomon doesn’t describe himself as a Bitcoin enthusiast, and numerous implications of the upcoming big transition should be carefully considered. However, he does acknowledge that Bitcoin is not just another ‘Ponzi scheme.’  

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Mending relations with banks

Goldman Sachs is a multinational investment bank that offers different kinds of loans, issues credit cards and opens savings accounts. While not being particularly Bitcoin-friendly, Goldman Sachs has never shown an aggressive attitude towards this cryptocurrency under its soon-to-be former CEO Blankfein. He didn’t rule out the possibility of crypto mass adoption. In sharp contrast to this, another Wall Street giant J.P. Morgan famously blasted Bitcoin as ‘fraud.’


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It is worth mentioning that Goldman Sachs isn’t the only big shark that expressed interest in crypto. BlackRock has also made headlines following its tentative exploration of Bitcoin and upcoming investments. Many experts predict that this is the start of another Bitcoin bull run.
 

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It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst


It Could Take Bitcoin 22 Years to Retest Its ATH: UBS Analyst
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The fact that Bitcoin saw its price breaking above $5,000 at the beginning of April made everyone highly optimistic about the prospects of a full-fledged bull run. However, crypto bulls shouldn’t hold their breath since it could take decades for the number one currency to recover from its epic downfall.

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Bitcoin compared to other bubbles  

After comparing Bitcoin to other bubbles, UBS analyst Kevin Dennean came to a conclusion that BTC will most likely follow their lead, Business Insider reports.
However, here’s a catch – Bitcoin will have to undergo a long-lasting recovery, so it is not reasonable to expect another bull run in the nearest future. For comparison, it took the Dow Jones Industrials 22 years to reach its previous peak.   


‘We're struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are,’ Dennean claims.

Bitcoin compared to other bubbles  

Picture: ©FactSet

With that being said, it is still not guaranteed that a certain bubble retests its ATH even after decades since a big burst. Nikkei, despite reaching its 20-year highs in October 2017, was still 50 percent lower than its ATH that was recorded in 1989.

Nikkei

Picture: ©ATLAS

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When you lose, you win

During the peak of the crypto market, Bitcoin was frequently compared to the infamous tulip mania, but these two barely had anything in common (except for the horrible stability of value). Hence, it hardly makes sense to apply a certain pattern and expect Bitcoin to behave in a similar fashion to other bubbles.

Historically, enormous price crashes actually benefited Bitcoin. As reported by U.Today, Bitcoin trader recently noticed that the BTC price rise 5.1-16.89 times every 70+ percent plunge. Crypto bulls have every reason to expect a similar outcome this time around.

'Shadow of bull statue on texture tiles floor metaphor of bull market is coming for stock market or investment asset' image by 123rf.

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