First Mover: Bitcoin Rally Shows Traders Don't Care That Goldman Hates Their Asset Class

Traders can also gloat over how much better bitcoin is performing in 2020 than Goldman Sachs shares.

AccessTimeIconMay 29, 2020 at 12:51 p.m. UTC
Updated Sep 14, 2021 at 8:46 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Cryptocurrency traders don't seem to care that Goldman Sachs is such a bitcoin hater. 

At least, that's the signal markets are sending. 

Bitcoin prices have surged since the Wall Street heavyweight's money-management division declared in a presentation this week that the cryptocurrency is "not a suitable investment for our clients," merely a beneficiary of a "mania" worse than the infamous run on Dutch tulips in the 1600s. 

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

The bullish market reaction shows crypto traders largely shrugged off Goldman's bearish commentary, doubling down on bitcoin while spewing vile condemnations and ridicule of the analysis on Twitter.

On Thursday, bitcoin rose more than 2% to about $9,400. The price is now up 33% in 2020, versus a 6.2% decline on the year for the Standard & Poor's 500 Index of large U.S. stocks. Goldman's own shares are down 12%.


One cryptocurrency trader even speculated Goldman may have weighed in on bitcoin because the Wall Street firm's clients were begging to know whether they should jump in – or put another way, if they were at risk of missing out on future rallies. 

The global backdrop is that investors are desperately seeking ways to make money these days, with interest rates on U.S. Treasury bonds close to historic lows. Buoyant stock-market valuations don't seem to reflect the economic devastation from the coronavirus. (A report Thursday showed more than 40 million jobless claims have been filed since early March.)       

Bitcoin might be getting a closer look from big money managers and rich families following reports earlier this month that the legendary hedge-fund manager Paul Tudor Jones II is now betting on the asset. Investors also might be looking at the year-to-date returns and wondering why Goldman didn't steer them toward bitcoin sooner. 

"Goldman Sachs would not have put together this fancy presentation without demand or questions about crypto from the clients," said Denis Vinokourov, head of research at the London-based digital-asset firm Bequant.

Patrick Lenihan, a Goldman spokesman, said the presentation "speaks for itself," declining to comment further.

Invented just 11 years ago, bitcoin has already smeared egg on a lot of prominent naysayers' faces. Past performance, of course, is no guarantee of future success. But the list of casualties includes the billionaire investor Warren Buffett, who in February described the cryptocurrency as having "no value," only to see the shares of his own conglomerate, Berkshire Hathaway, tumble 18% this year as bitcoin rose.  

It goes without saying, as Goldman's investment analysts pointed out, that bitcoin prices can be extremely volatile.

That might just be the nature of new technologies: Volatility isn't uncommon among many small-cap tech companies whose stocks were taken public by investment bankers working for Goldman and its Wall Street competitors. shares tumbled 80% amid the dot-com crash of 2000 – long before the internet-commerce giant eclipsed department stores including Sears, which filed for bankruptcy in 2018. Another U.S. department store chain, J.C. Penney, filed for bankruptcy protection earlier this month, as sales diminished because of coronavirus-related lockdowns.

But many big, sophisticated investors are comfortable with risk, as long as the potential rewards look attractive enough; long-term growth is the goal.

On that count, bitcoin's market capitalization has grown 11-fold since the end of 2016 to $173.7 billion. Over the same period, Goldman's own market cap has fallen to $69 billion from about $95 billion.

Jill Carlson, co-founder of the Open Money Initiative and an investor in early-stage startups with Slow Ventures, wrote Thursday in an op-ed for CoinDesk that Goldman's report contained so many flaws that "it's not worth detailing every misconception or failed bit of logic." According to her LinkedIn profile, she worked as a credit trader at Goldman in the early 2010s.

That representatives have not adequately articulated the "defining attributes and uses of this paradigm-shifting technology" might be a fault of the crypto industry, Carlson added.

Facebook CEO Mark Zuckerberg, addressing questions about the proposed libra stablecoin at an annual shareholder meeting on Wednesday, noted how slow the traditional financial system had been to upgrade the plumbing behind payments.

The infrastructure around payments "hasn't been updated in a very long time," Zuckerberg said.

The broader question might be whether Goldman risks falling behind a fast-evolving digital-asset industry that, by some accounts, aims to disrupt Wall Street and potentially displace it.

Or if the firm's clients risk missing out on a big rally, with quick-to-pivot Wall Street eventually embracing cryptocurrencies as a promising asset class. 

Those clients have certainly missed out on the rally so far this year. 

Tweet of the day

Bitcoin watch

BTC: Price: $9,394 (BPI) | 24-Hr High: $9,621 | 24-Hr Low: $9,008


Trend: While bitcoin has gained over 8% so far this week, it's still lacking clear directional bias. 

Prices are yet to move out of a symmetrical triangle pattern on the daily chart represented by trendlines connecting the May 10 and 25 lows, and May 7 and 18 highs.

A break above the upper end of the contracting triangle, currently at $9,780 would imply a continuation of the rally from the March low of $3,867 and could lead to a convincing move to the February high of $10,500. 

On the other hand, a UTC close below the lower end of triangle at $8,782 would confirm a bullish-to-bearish trend change. That could cause more sellers to join the market, leading to a deeper price decline toward $8,000. 

Both the falling wedge breakout and invalidation of a lower-highs setup confirmed earlier this week on the four-hour chart indicate scope for a rise to the triangle resistance at $9,780. Further, demand for bearish bets or put options is weakening, as evidenced by a recent decline in the one-month put-call skew from 22% to 6%. 

On-chain activity suggests the big players are accumulating. The number of addresses holding at least 100 BTC rose as prices dipped from $10,000 to $8,630 in the seven days to May 25, according to data provided  by Glassnode. That may be a sign many investors are long-term bullish. 

At press time, bitcoin is trading near $9,400, having risen from $8,800 to $9,620 in the last two days. 

Sign up to receive First Mover in your inbox, every weekday.
Sign up to receive First Mover in your inbox, every weekday.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.