Goldman Sachs Admits Bitcoin is Real Money, Cites Use Cases in Developing World

White shoe investment bank Goldman Sachs has admitted that Bitcoin and other digital currencies could succeed as real money in developing economies. Goldman strategists wrote in a recent report:

“In recent decades the U.S. dollar has served its purpose relatively well. [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.”

Nonetheless, the investment bank warns against expecting 2017-level 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. Thus, digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.”

Changing tides

This is a remarkable change of tune from the skepticism with which big banks and “mainstream” investors have generally treated digital currency. JPMorgan Chase CEO Jamie Dimon famously called Bitcoin a fraud last year, while legendary billionaire investor Warren Buffett insists that Bitcoin isn’t money and people should stay away. Likewise, hedge fund magnate Ray Dalio dismisses Bitcoin as a bubble…

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