• Sun. Nov 29th, 2020

Dimancherouge

Technology

Goldman Sachs Warned It Will Soon Be Scrambling To ‘Catch Up’ On Bitcoin

Goldman Sachs
GS
, along with other Wall Street giants, has been eyeing bitcoin and cryptocurrency markets this year—and has already taken some big steps into the space.

Those steps follow the bitcoin price, up some 40% so far this year and hovering at a little over $10,000 per bitcoin, finding support through a roller coaster 2020 as a potential hedge against a wave of inflation that some see on the horizon.

Now, after it was announced last month a 20-year Goldman Sachs veteran will be joining merchant bank Galaxy Digital in early 2021, the firm’s founder and chief executive, Michael Novogratz, has warned Goldman will soon be scrambling to catch up with its head start in bitcoin and crypto.

“Goldman Sachs is going to have to get into crypto themselves,” Novogratz said, speaking over the phone, adding Galaxy Digital has “an advantage” in understanding decentralized finance and crypto but Goldman Sachs has “a ton of talent” that it will use to catch up within the next “three of four years.”

Last month, Galaxy announced Goldman Sachs partner Damien Vanderwilt will be joining the firm early next year as co-president and head of global markets, tasked with closing the shrinking gap between Wall Street, bitcoin and crypto.

“I see a relatively steady drive into the space now,” Novogratz said, pointing to a flow of Goldman and Wall Street executives into the bitcoin and cryptocurrency industry over the last year. “The macro backdrop at the moment is making the bitcoin and crypto story very powerful.”

Novogratz sees China’s looming launch of its bitcoin and blockchain-inspired digital yuan as well as unprecedented central bank and government intervention in the markets this year as the main drivers of bitcoin and crypto interest on Wall Street and credits them both with “giving crypto and the bitcoin price a tailwind.”

“The bitcoin price will take out $12,000 before the end of the year,” according to Novogratz, but he named $50,000 as the “next big number” for him—more than double bitcoin’s all-time high of around $20,000 set at the height of bitcoin-mania in late 2017.

However, bitcoin’s brief 2020 summer bull run has petered out over the last few weeks, with bitcoin bulls fighting hard to hold the $10,000 line at the beginning of September. The bitcoin price, climbing over $10,000 in late July, has now remained above the psychological $10,000 for the longest period in its history.

“Getting to $50,000 or $100,000 is not crazy,” Novogratz added. “It’s going to be a natural evolution.”

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