Local Crypto Expert (and Bitcoin owner) Offers Unique Analysis

By Richard Harvey | Guest Commentary

Editor’s note: Richard Harvey, writes about crypto currency for this newspaper. Here, he offers a well-reasoned response to an April 2024 article in the Wall Street Journal titled “Goldman’s Crypto Naysayer Isn’t Tempted by Bitcoin Rally.” Mr. Harvey, an Oriental resident, describes himself as “Business Owner, Health Care Innovator, Student of Sustainable Economics & Patriot.”

NEW YORK CITY –  As chief investment officer at Goldman Sachs,  Ms. Sharmin Mossavar-Rahmani has a strong interest maintaining business as usual.  Aside from the fact that this is impossible, she of course feels existentially threatened. Many of the functions hitherto under control of the legacy financial infrastructure are being supplanted by the emerging crypto ecosystem.

In fact, the CEO of JP Morgan Bank,  Jamie Dimond, was initially the adamant enemy of crypto. Now JP Morgan has a crypto desk! One wonders which institution will be around in 10 years –Goldman Sachs or JP Morgan?

1) Mossavar-Rahmani of Goldman Sachs: “Have you thought about what it’s worth?”  Harvey’s response: When an asset has gone up over a period of 15 years from a few cents to now $115,000 per Bitcoin, who knows?

2) Mossavar-Rahmani: “Have you thought about at what point you will get out?” Harvey’s response: Bitcoin is a store of value with the unique characteristic – there can never be more than 21 million of them. Major financial institutions are holding Bitcoin in Exchange Traded Funds. As Bitcoin becomes more expensive, retail buyers can buy fractions of a Bitcoin.  Exchange Traded Funds are a major opportunity for financial institutions.

3) Mossavar-Rahmani: “Cryptos do not produce earnings, cash flows, or dividends.” Harvey’s response: This is true with ‘meme tokens,’ which have no function, but altcoins can be regarded as the apps of Microsoft. If there is an indispensable function, there is a revenue stream. There is also the matter of staking crypto, which produces high yields – not because of high risk but rather the possible elimination of intermediaries such as Goldman Sachs.