Bitcoin “Is Not for Me, I Don’t Do It” Says Goldman Sachs CEO

Francisco Memoria
  • Goldman Sachs CEO Lloyd Blankfein revealed bitcoin isn't for him, as he doesn't own any.
  • Blankfein did note that if cryptocurrencies like bitcoin make it and prove they aren't a fad, he would be able to explain why.

Goldman Sachs CEO Lloyd Blankfein has recently revealed he isn’t worried about cryptocurrencies like bitcoin in “any systemic way.” To him, people are currently passionate for and against cryptocurrencies, but he isn’t a fan, as he said it “is not for me, I don’t do it.”

During an interview at the Economic Club of New York, the financial institution’s chief executive officer noted he has in the past passed on fads that worked out – citing cellphones as an example. Blankfein added:

“Now they have cryptocurrency and I always thought “I can’t say why it should work, but if it did work I could explain in hindsight why it did.”

Lloyd Blankfein

The CEO went on to refer to the evolution of money, noting that people started out with gold as ‘real’ money, which then turned to coins and notes backed by a specific amount of gold. These could be redeemed for the precious metal.

Over time, as Blankfein said, notes supposedly equivalent to an amount of gold started being used, without being redeemable. He added that “at some point they give you a paper that says ‘it’s worth $5, [but] we’re not gonna redeem it, we don’t even have the $5 if we wanted to.’”

Reflecting on how fiat currency came to be and the government’s control over money, he asked: “why can’t you have a consensus currency?” While he isn’t a bitcoin fan, he noted it would be too arrogant to say cryptocurrencies won’t make it.

Blankfein has in the past revealed he sees bitcoin and other cryptocurrencies as a “vehicle to perpetrate fraud.” Later on, however, the Wall Street titan said he has a “level of discomfort” with the flagship cryptocurrency, although he noted he is open to it.

Goldman Sachs itself, as CryptoGlobe covered, has developed plans to launch a bitcoin futures trading operation. While the exact date in which the operation will be launched hasn’t yet been set, the move was made responding to popular demand after hedge funds, endowments, and other hedge funds showed interest.

Notably reports have suggested Blankfein may leave Goldman Sachs by the end of this year, which could mean the financial institution’s stance towards cryptocurrencies could in the future change.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.