Here's What Goldman Is Telling Big Money Clients About Bitcoin Here's What Goldman Is Telling Big Money Clients About Bitcoin

Here's What Goldman Is Telling Big Money Clients About Bitcoin

Did you know? The IRS treats virtual currency as property.

 

Goldman Sachs Group Inc. is acknowledging that it’s getting harder for institutional investors to ignore the cryptocurrency market with total assets ballooning to $120 billion and bitcoin soaring more than 200 percent this year.

“Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are), real dollars are at work here and warrant watching,” analysts including Robert Boroujerdi and Jessica Binder Graham wrote in a Q&A sent to clients.

The debate has shifted from the legitimacy of the “fiat of the Internet” to how fast new entrants are raising funds, with initial coin offerings and fundraising that now exceeds Internet angel and seed investing. These are some of the questions the Goldman Sachs analysts answered:

How to Trade Cryptocurrencies in the U.S.?

Digital exchanges and block trades, and options will be coming soon. While individual investors can trade virtual coins on various online exchanges, institutional traders have largely stayed out of the cryptocurrency market due to its relatively small size, structure of mandates and volatility. But block trading exists to facilitate the execution of larger orders. In addition, Bitcoin options exist and are traded on offshore exchanges, and could be traded in the U.S. by the end of the year.

Are Cryptocurrencies a Currency or a Commodity?

Coins have attributes of a currency, as they’re presented and trusted by some medium of exchange, and of a commodity, as they’re a limited resource. The classification of cryptocurrencies varies by country, government and even application. In the U.S., the Internal Revenue Service has ruled that virtual currency does not have legal tender status in any jurisdiction. For tax purposes, the IRS treats virtual currency as property.

What is Ethereum?

A platform first, and a cryptocurrency second. Unlike bitcoin, which is designed to be an alternative to "real money," Ethereum is more of a platform set up to run any decentralized application and automatically execute “smart contracts” when certain conditions are met. Ethereum offers a digital currency called ether, but this is just one component of its smart contract execution and primarily used to facilitate and reward using the network. The rise of ethereum has not come without setbacks, including the $60 million hack of a venture capital-like organization called "The DAO."

 

A fundraiser through token sales. The amount of money funding ICOs has grown exponentially and the speed at which cash is raised with often little more than a white paper and Internet browser has sounded the alarm bells from parties including the Securities and Exchange Commission and the People’s Bank of China. According to Coin Schedule, ICOs have raised $1.25 billion this year, outpacing global angel and seed stage Internet venture capital funding in recent months.

What the Goldman strategists didn’t address is whether institutional investors should be buying cryptocurrencies or not.

 

Shared from: Bloomberg

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

back to top

iScope

Boldstart Founder Launches Hyperledger Fabric's First Blockchain Accelerator

The founder of VC firm Boldstart Ventures is launching the first accelerator dedicated exclusively to startups building on the Hyperledger Fabric blockchain.

CNN launches daily news show on Snapchat

CNN on Monday began streaming "The Update," a daily show on Snapchat featuring at least five news stories each episode from reporters and bureaus around the world, to attract younger viewers.

Quora now launches retargeting for advertisers

Quora’s newly launched ads platform now supports retargeting ads on the question-and-answer network.

Facebook faces scare that teens are going to Snapchat and Instagram. Again.

 Now playing on the internet: the episode in which everyone freaks out that young people are abandoning Facebook in favor of hot new social media services like Snap and Instagram.

IBM partners with Walmart, Unilever, Nestlé, and other food giants, to apply blockchain tech to food supply chains

They will be aiming to use blockchains to maintain secure digital records and improve the traceability of their foodstuffs

Blockchain can make social networks more private — and profitable for you

Fact: You’re going to spend a total of five years of your life on social media. But- is blockchain answer to everything?

The HuffPost’s tabloid-style homepage is paying dividends

The move was designed to deliver what Polgreen described as “a visceral snapshot of the day.”

Dashbot’s codeless Twitter Integration is now live!

Integrate your DM bot without code and in 10 seconds.

50 Bitcoin Exchanges Have Filed with the Japanese Financial Authority

In April, the Japanese government amended its fund settlement law to recognize bitcoin as a legal means of payment

Billionaire Calvin Ayre Acquires Crypto Media Outlet Coingeek

  The plan is for Calvinayre.com to continue to cover Bitcoin news as it relates to the gaming industry

Asus Debuts Specialized Motherboard for Cryptocurrency Miners

"Cryptocurrency and blockchain are here to stay"

Chatbot That Helps Users Appeal Parking Tickets Comes To U.S.

A chatbot called DoNotPay that helps users appeal parking tickets for free in the U.K. is now available in the United States.

How TD Ameritrade tackles security in Facebook Messenger chatbot

Chatbot is designed to answer faster than a human could.

How Blockchain Is Monetizing User’s Experience and Skills

Generating value is the key concept sustaining the explosion of Blockchain offerings in 2017.

Bezos on Amazon’s AI and Machine Learning Strategy

[It's all about] enabling other organizations to leverage the game-changer that is machine learning.

Mongolia's Hottest New Social App Is All About Horses

Although cowboy culture is mostly nostalgia in the United States these days, many rural Mongolians still rely on their horses in daily life. In Mongolia, horsemanship is one of the most celebrated aspects of their culture, even on social media. "If we...

Startups could be key to fixing tech's diversity problem

Silicon Valley companies are learning a hard lesson: They can't escape their attitude problems.

Android Oreo released by Google

Google has released the latest version of its Android mobile operating system (OS), which will be named after Oreo chocolate biscuits.

How RBC is using a blockchain to overhaul its loyalty program

“We see loyalty as a great use case for blockchain to allow us to provide customers more real-time access to rewards points to provide an almost Starbucks-like experience.”

Why finance brands are so hot on content marketing

Content is one way to make people return to their site to see new updates, buy new products and invest more money.

Reddit now allows users to upload videos

Videos are coming to Reddit, thanks to a new feature that allows users to upload video clips directly to the service.

Sharp sues Hisense over a foreign “gag order”

Sharp, a Japanese electronics manufacturer, has filed a lawsuit challenging a foreign gag order that company lawyers say prevents Sharp from talking about its own brand.

How A Police Body Camera Company Is Becoming An Artificial Intelligence Company

Like most technology companies today, Axon’s goal is to collect data; the free body camera trial is just another avenue to generate and collect more of it.

Mic Lays Off Dozens Just a Week After Promising Not To

A number of online outlets, including Mashable, Vice, and MTV News, have recently slashed their writing staffs to focus on producing visual content

Kit Kat accused of copying Atari game

Kit Kat's maker Nestle has been accused of copying Breakout, the 1970s computer game, in a marketing campaign.

YouTube TV expands to 14 new markets

YouTube is broadening access to live TV streaming as younger viewers increasingly watch shows online and traditional broadcast networks grapple with aging demographics among viewers.

Hyundai looks to build a >300-mile-range electric car

More carmakers are looking toward electric vehicles as fuel cell falters

Why Bancor Wants To Become The YouTube Of Cryptocurrency

If Bancor overcomes the initial scandals (it shortchanges its users' by rounding token values) Bancor could reshape the cryptocurrency marketplace as we know it.

The best of Siri: 11 funny responses from the iPhone's virtual assistant

Since its launch in 2011, Siri has become increasingly intelligent, and can now hold basic two-way conversations with users.

How Yogscast built a media empire

The newer generation doesn’t want to be told how to do things, they want to see it.

Skype’s new look arrives on the desktop in preview form

The chat-focused update comes with new features for messaging and calls.

Subscribe to the Business Brief Newsletter

Get our complimentary briefing, featuring news & analysis of the business trends and practices.
Terms and Conditions