Goldman Sachs recently stated that it expects Bitcoin’s (BTC) price to decline further, as it argues it does not function effectively as money.

In its extensive 42-page economic-outlook report, the financial firm said that “cryptocurrencies do not fulfill any of the three traditional roles of a currency.” According to Goldman Sachs’ investment advisors, digital currencies “in their current incarnation” are neither a reliable medium of exchange, nor a good unit of account, nor a stable store of value.

Cryptocurrencies Will “Not Retain Value”

The report noted that bitcoin’s price has dropped over 60% after reaching record-level highs in December 2017. Additionally the report pointed out that Ethereum’s (ETH) price declined nearly 70% from its all-time high of over $1,400 in early January to around $450.

Commenting on the volatile crypto market, Goldman Sachs’ investment strategy team said:

Our view that cryptocurrencies would not retain value … remains intact and, in fact, has borne out much sooner than we expected.

Goldman Sachs' investment strategy team

The investment team, led by Sharmin Mossavar-Rahamani, the chief investment officer at Goldman Sachs’ Private Wealth Management Group (PWM), expects “further declines [in cryptocurrency prices] in the future” mainly because of their inability to function as a legitimate medium of exchange.

Crypto Cannot Adversely Affect Traditional Markets

Despite the unstable nature of the digital currency market, the report stated that it “will not negatively impact the performance of the broader financial assets.” Currently, cryptocurrencies account for a mere 0.3% of the global GDP. Therefore, they represent an insignificant portion of the world’s multi-trillion dollar economy, the report noted.

Moreover, Goldman Sachs’ investment strategy group believes digital currencies “garner far more traditional media and social media attention than is warranted.” While the Wall Street giant may be critical of decentralized digital assets, it had announced its plans in December 2017 to launch a cryptocurrency trading desk.

Should Goldman Sachs follow through on its crypto plans, it could become one of the first major Wall Street companies to enter the nascent digital currency market.

Notably, Goldman Sachs’ negative outlook and statements regarding cryptocurrencies have come at a time when UBS, a large Swiss multinational financial firm, has also stated that bitcoin cannot be considered money. UBS’ extensive 34-page report cited the flagship cryptocurrency’s limited capacity to process transactions and its high volatility as reasons why it could not function as well as the more stable fiat currencies.

Meanwhile, the Dutch central bank recently said it doesn’t consider cryptocurrencies “real money” because they are not stable enough to be used for savings or to pay for everyday expenses.