Bitcoin can be the future of money, says Goldman

Last Updated: Thu, Jan 11, 2018 12:52 hrs
FILE PHOTO: The Goldman Sachs stall on the floor of the New York Stock Exchange

Can Bitcoin be the future of money?

Goldman Sachs, the most influential bank in the world in the eyes of many experts, has embraced the possibility of it being so.

"In recent decades the US dollar has served its purpose relatively well," Goldman Sachs strategists Zach Pandl and Charles Himmelberg wrote in a note on Wednesday.

But "in those countries and corners of the financial system where the traditional services of money are inadequately supplied, Bitcoin (and cryptocurrencies more generally) may offer viable alternatives", they observed.

Pandl and Himmelberg though underlined that if this hypothesis was to come true and bitcoin became a popular form of currency, investors should brace themselves for more prosaic, real-world returns.

"Our working assumption is that long-run cryptocurrency returns should be equal to (or slightly below) growth in global real output - a number in the low single digits," the strategists said. "Thus, digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals."

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The worldwide stock of money - including notes, coins and financial accounts - was calculated at $US82 trillion by the CIA as of the end of 2016. Bitcoin's current market value is around $250 billion.

It had previously been reported that Goldman Sachs is planning to launch a cryptocurrency trading desk.

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