"Buy bitcoin" is the message from a sales and trading desk at major US investment bank Goldman Sachs, as the world's best-known cryptoasset takes a breather from its summer rally.
In a note to clients posted on Twitter by Three Arrows Capital CEO Su Zhu, the New York-based bank uses data charting the bitcoin price movements to August 8, and focuses on technical chart analysis to suggest an potential upside of 22% - or dollar value gains of just over $2,500 per bitcoin at current price levels.
What is more surprising: that Goldman Sachs has a bullish target on $BTC, that they have any target at all, or that they use Elliott Wave Theory?— Su Zhu 🦁 (@zhusu) August 12, 2019
I'm personally most surprised they cant be bothered to use a chart that includes weekend price action. pic.twitter.com/ocpq7hr0qv
Using Elliot Wave analysis - which usually tracks the most recent five peaks and troughs, or waves - the investment bank's analysts suggested that at $11,880, the bitcoin price held the target for wave three out of five during July.
It suggested, therefore that support would be found near $11,904, and as long as it avoided the top of wave one at $10,791, there would be room for a rally up to $13,971 in the near term. It's worth noting, however, the analysis was conducted by a Goldman Sachs sales and trading desk, and doesn't reflect the bank's views.
The documents warn:
The views or ideas expressed herein are those of the desk and/or author only and are not an “official view” of Goldman Sachs; others at Goldman Sachs may have opinions or may express views that are contrary to those herein.This material is not independent advice and is not a product of Global Investment Research
Goldman and Crypto
Goldman Sachs has been among the more visible institutional investors declaring an interest in cryptoassets and has launched a new digital asset team, for which it is yet to announce a project manager.
Indeed, the job application went up on the firm's website last month, asking for the "most talented individuals in the world" to help develop a blockchain roadmap and create related products and services, and have relevant experience in "blockchain and digital asset product development.
When asked by French newspaper Les Echos in June what he thought about Facebook's aim to launch the Libra cryptocurrency, and plans by rival JPMorgan to launch its own tokenized asset, David Solomon, chief executive of Goldman said:
We do extensive research on the concept of 'tokenization', the potential of which we believe, and which designates the creation through the blockchain of a stable digital currency based on a basket of real currencies that can move money across borders and without friction.
Assume that all major financial institutions around the world are looking at the potential of tokenization, stable wedge and frictionless payments.
Bitcoin Price Predictions
So, latest note from Goldman analysts predicts a rally that - although robust by the standards of most other financial market assets and investment vehicles - is actually rather modest by the standards of many bitcoin enthusiasts.
Here's a brief look as some of the more bullish predictions:
- On June 12, Thomas Lee, head of Fundstrat Global Advisors, said he believes that the "fear of missing out" (FOMO) will drive the bitcoin price up $40,000 within five months.
- Also in June, Anthony Pompliano, co-founder of Morgan Creek Digital Assets, said he had "70-75% belief" that bitcoin would reach $100,000 by the end of 2021.
- After accurately predicting in 2014 that bitcoin would pass the $10,000 mark in three years, tech investor Tim Draper now believes $250,000 is possible before the end of 2022.