Goldman Sachs Sees Most Cryptocurrencies Crashing
Goldman Sachs experts refer to the internet bubble of the late 1990s and predict many coins will not return to their recent peaks ever
“It’s unlikely that we’ll see them survive in the long run,” says Steve Strongin, head of Goldman Sachs global investment research, raising concerns about the high correlation between the different cryptocurrencies. “Another new thing is that new coins doesn’t move the value of the old, they create a new asset class.”
He adds, that the cryptocurrencies are traded in a market, in which few winners take the most, and the coins have no intrinsic value.
At the beginning of February, a huge sell off reduced the value of the crypto market by a whopping USD 550 billion. The industry flagman Bitcoin dropped below USD 6000 per unit for the first time since November.
Strongin goes further, calling the cryptoworld “an experiment”, like the Internet bubble of the 1990s. “Very few of the companies, that existed in the late 90’s managed to gain value, except Google and Amazon, that did but in completely new form,” he points out, adding that the current coin prices can increase only for a handful of survivors. Strongin admits that the Blockchain technology, that lies behind cryptocurrencies made financial transactions faster and cheaper. But he underlines that only few of the cryptocurrencies will become the Amazon and Google of the 90s, while others will end up as defunct search engines.
Bitcoin is not the new gold, Goldman Sachs warned already in October. Two another economic gurus Nouriel Roubini “Dr. Doom” and financial tycoon Warren Buffet have also cautioned that cryptocurrencies will come to a bad ending.
On the contrary, some market analysts predict that the cryptocurrency market can reach USD 1 trillion with over 1500 coins in existence and 8600 markets (as of 12 February).