Goldman Sachs Says Cryptocurrencies will not Experience New Highs
When the price of several cryptocurrencies suffered a decrease earlier this week, many market analysts claimed that the situation will not last and digital currencies will gain back their value. The price of several cryptocurrencies has recovered since and some predictions indicated that the price of bitcoin may actually grow to $50,000 by the end of 2018.
Goldman Sachs does not believe in the future of cryptocurrencies
However, it seems that not everyone agrees with that. For instance, Goldman Sachs seems to not believe in the future of cryptocurrencies. The head of investment research for the huge bank, Steve Strongin, claimed in a report that some cryptocurrencies may not survive and the drop recently suffered by cryptocurrencies could become much worse.
Strongin claimed that most of the digital currencies that are now on the market will not be able to survive in their current form. This means that investors could turn out losing important sums of money. According to Strongin, the recent price drop experienced on the cryptocurrency market is just an indication that this market is a bubble. He said:
“The high correlation between the different cryptocurrencies worries me. Because of the lack of intrinsic value, the currencies that don’t survive will most likely trade to zero.”
Strongin explained that the market is still dealing with issues such as slow transaction times, security problems and high maintenance fees:
“Are any of today’s cryptocurrencies going to be an Amazon or a Google, or will they end up like many of the now-defunct search engines? Just because we are in a speculative bubble does not mean current prices can’t increase for a handful of survivors. At the same time, it probably does mean that most, if not all, will never see their recent peaks again.”
As many other people who previously talked about the risks associated to the cryptocurrency market, Strongin appreciated the technology on which the blockchain is being built. He claimed that this technology could help the financial world.
