SAN FRANCISCO — Most big banks have tried to stay far away from the scandal-tainted virtual currency Bitcoin.
But Goldman Sachs, perhaps the most storied name in finance, is bucking the risks and moving ahead with plans to set up what appears to be the first Bitcoin trading operation at a Wall Street bank.
In a step that is likely to lend legitimacy to virtual currencies — and create new concerns for Goldman — the bank is about to begin using its own money to trade with clients in a variety of contracts linked to the price of Bitcoin.
While Goldman will not initially be buying and selling actual Bitcoins, a team at the bank is looking at going in that direction if it can get regulatory approval and figure out how to deal with the additional risks associated with holding the virtual currency.Rana Yared, one of the Goldman executives overseeing the creation of the trading operation, said the bank is cleareyed about what it is getting itself into.
I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world,” Ms. Yared said. “For almost every person involved there has been personal skepticism brought to the table.”
Bitcoin (BTC/USD) forecast and analysis on January 24, 2020
Cryptocurrency Bitcoin (BTC/USD) is trading at 8563. Cryptocurrency quotes are trading above the moving average with a period of 55. This indicates a bullish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on January 24, 2020
As part of the Bitcoin exchange rate forecast, a test level of 8420 is expected. Where can we expect an attempt to continue the growth of BTC/USD and the further development of the upward trend. The purpose of this movement is the area near the level of 9160. The conservative area for buying Bitcoin is located near the lower border of the Bollinger Bands indicator strip at 8400.
Cancellation of the
Bitcoin (BTC/USD) forecast and analysis on January 24, 2020 implies a test level of 8420. Further, growth is expected to continue to the area above the level of 9160. The conservative buying area is located near the area of 8400. The breakdown of the cryptocurrency growth option will be the breakdown of the level of 8320. In this case, we should expect further fall.
Billionaire investor advises people to stay away from Bitcoin
- Ray Dalio said that Bitcoin is too volatile to be a store of wealth, at present. Instead, he suggests a small allocation in gold.
- He also noted that currently, “cash is trash” and that investors must look for a well-diversified portfolio.
The founder of investment firm Bridgewater Associates, Ray Dalio, has warned people not to get involved with speculative currencies like Bitcoin in 2020. Appearing on CNBC’s “Squawk Box” at the World Economic Forum in Davos, Switzerland, Dalio said:
There’s two purposes of money, a medium of exchange and a store hold of wealth, and Bitcoin is not effective in either of those cases now.
He believes that Bitcoin is too volatile to be a
Because of the volatility, you can’t go next to it. Someday, you know, I would say Libra or something with more stable value has got more potential. But also, who is going to do the buying? Central bankers and others? What are they going to hold as reserves?
What has been tried and true? Are they going to hold digital Bitcoin? They are going to hold gold. That is a reserve currency, and it has been a reserve currency for 1,000 years… A bit of gold is a diversifier, and that’s the advice I can give.
He also noted that currently, “cash is trash” and that investors must look for a well-diversified portfolio.
Visa continues to dwarf Bitcoin in this important metric
Despite optimistic predictions, Bitcoin still has a long way to go before it can compete with companies such as Visa. The fiat currency giant reported transaction volume of over $11.2 trillion in 2018, while Bitcoin network only managed to transact around $2.2 trillion until 2019.
Visa dominates all payment processors with $11 trillion transaction volume
While the crypto industry as a whole seems confident that digital assets will ultimately replace traditional fiat currencies, the reality is that there’s a long way to go before the two can even compete in the same category.
The growing transaction volume of most high-market cap cryptocurrencies definitely shows that major improvements are made. However, most of that growth fades away when compared to the big players in the payment processing industry.
According to its annual performance report, Visa saw a total transaction volume of just over $11.2 trillion. The volume is the sum of both the payment volume and cash volume, with the payment volume being the total monetary value of transactions on Visa-branded cards and payment products, the company explained in the report.
This is a huge increase from the $10.3 trillion the company reported in 2017 and an even bigger increase from the $8.1 trillion in total volume
Bitcoin still has a long way to go to catch up with Visa
Bitcoin‘s numbers aren’t nearly as impressive as these. However, it’s worth noting that digital asset data can often be misleading and can never be taken at face value. As a Fidelity Digital Assets research put it, one of the most commonly overstated measures is Bitcoin’s transaction volume.
Most data providers use an unspent transaction output (UTXO) system, which doesn’t distinguish between economic and non-economic transactions. Because of that, the difference between the adjusted and unadjusted transaction value figures are often very significant.
According to the report, Bitcoin’s total adjusted transaction value from inception to Dec. 11, 2019, was approximately $2.2 trillion. It’s unadjusted transaction volume, however, stands at approximately $7.5 trillion.
While the $2.2 trillion is a significant achievement for a system as young and as novel as Bitcoin is, it’s still a long way behind Visa. Bitcoin’s transaction volume was amassed over a period of more than 10 years, while Visa recorded its $11.2 trillion from September 2017 to September 2018.