Most Cryptocurrencies Will Hit Zero, According To Goldman Sachs
Is the Bitcoin bubble finally bursting? According to experts, it certainly looks like it.
Now that the prices of cryptocurrencies have fallen nearly $500 billion in the past month, some experts say that the bitcoin bubble has finally burst. Soon, they say, most cryptocurrencies will hit zero.
There are currently around 1,300 cryptocurrencies in the market. Bloomberg reports that Steve Strongin, Goldman Sachs Group Inc.’s global head of investment research, wrote in a Feb. 5 note that most of these digital currencies probably won’t survive.
“The high correlation between the different cryptocurrencies worries me,” Strongin said. “Because of the lack of intrinsic value, the currencies that don’t survive will most likely trade to zero.”
He compared the current cryptocurrency situation to that of the internet bubble of the late ’90s, saying that very few of the companies from back then have survived. Some exceptions are Amazon and Google.
But are any of today’s cryptocurrencies going to be an Amazon or Google?
“Just because we are in a speculative bubble does not mean current prices can’t increase for a handful of survivors,” Strongin noted. “At the same time, it probably does mean that most, if not all, will never see their recent peaks again.”
Cryptocurrencies will hit zero: Others chime in
Strongin’s worries have been echoed by other experts, such as noted economist Nouriel Roubini. In an interview with Bloomberg, Roubini called Bitcoin the “mother of all bubbles”, saying that the bubble has finally burst. He went on to say that other cryptocurrencies are “even worse” than Bitcoin.
Even Ethereum founder Vitalik Buterin has warned investors to put their money in more traditional assets. He tweeted:
Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.
— Vitalik Buterin (@VitalikButerin) February 17, 2018
Do you think cryptocurrencies will hit zero? What does this mean for your investments?
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