Wall Street has been willing to dabble in bitcoin—after all, the Street loves nothing like it loves a buying opportunity—but it’s not going laser-eyes all-in, judging from some of the research reports this week.
On Wednesday, J.P. Morgan strategist Nikolaos Panigirtzoglou waded through the noise of China bans and Elon tweets, and concluded that bitcoin’s real problem is fund flows. Specifically, that they are flowing out, and not in. “More than a month after the May 19th crypto crash, bitcoin funds continue to bleed,” he wrote. “Institutional investors, who tend to invest via regulated vehicles such as publicly listed bitcoin funds or CME Bitcoin futures, still exhibit little appetite to buy the bitcoin dip.”
Well, why aren’t they buying the dip? Goldman Sachs has an answer for that. The firm released an in-depth report over the weekend that concluded bitcoin as an asset class didn’t add any appreciable value to its clients’ portfolios. Bitcoin does not, the firm said, provide a cash flow. It doesn’t have earnings. It’s not a reliable diversification play, and it certainly doesn’t dampen volatility. Worst of all for the diamond-hands set, Goldman said equities or bonds are a better store of value and inflation hedge than bitcoin.
Bitcoiners cried “FUD” of course, but with their beloved digital currency banging hard around the $30,000 level, and few dip-buyers coming in, the sound they’re actually hearing is, like, “thud.”