Goldman the Bear vs Bloomberg the Bull

Last week, Goldman Sachs listed five reasons investors should avoid bitcoin. This was an obvious push by a bank with vested in interests in everything that bitcoin is not. Go ahead and search for all the great comebacks to this on twitter and elsewhere. These assholes barely knew what they were talking about.

Bitcoin does not provide the absurd amount of fees that banks generate. In 2017, people paid the banks $34.3 billion in overdraft fees. That’s $34.3 billion, from what is more often the poorer elements of the working class, just because banks can. It’s grotesque. It’s theft. It’s wrong.

You can’t charge people overdraft fees with bitcoin.

But taking another line, Bloomberg released a notice recently informing investors that bitcoin could instead double in value this year, reaching its former all-time high of $20,000.

The overall note is interesting. “Something Needs to Go Really Wrong for Bitcoin to Not Appreciate”. Bloomberg compares bitcoin to gold. It notes that the recent move up is mirroring bitcoin’s 2016 return to its previous peak, a trend that has been hoped for by all bitcoin bulls.

This particular graph of theirs was interesting. Looking at the price of gold vs bitcoin, as they lay it out on their timeframe, there is almost a tailwind or lag in the movements. Gold seems to get the price movement first, and then bitcoin. As gold has continued to surge recently, the tailwind would suggest a surge in bitcoin soon.

Another interesting aspect the report touches on is the impact of COVID-19. As the disease hastens the shift away from paper money, governments are also stimulating more quantitative easing. This helps independent stores of value, like gold or bitcoin, as fiat currencies are flooded and inflation increases.

Aside from their report, the question is, why does Bloomberg feel hopeful about bitcoin where Goldman Sachs sees it as a threat?

On the basic level, I’d just assume that those behind the report see the potential to make some sick gains on crypto, where Goldman either plans to short, or even stay out entirely. Make your own call, but I see these two positions as indicating their own personal shorts/longs.