Connect with us

Bitcoin

Bitcoin [BTC] and cryptocurrencies value is going to decline in the future, says Goldman Sachs

Priya

Published

on

Bitcoin [BTC] and cryptocurrencies value is going to decline in the future, says Goldman Sachs
Source: Unsplash

Goldman Sachs, one of the biggest financial giants around the globe has released its mid-year Outlook for the first time. The report follows the “Outlook – Unsteady as She Goes” released in the month of January 2018. It states that the company considers Bitcoin and Cryptocurrencies as one of the six unsteady factors which are threatening the Outlook.

The mid-year Outlook summarizes that, as mentioned in their January 2018 report, their view on Bitcoin and Cryptocurrencies remains intact and the outcomes of cryptocurrencies and Bitcoin has been realized sooner than they had expected.

According to the report, Bitcoin [BTC] has already lost more than 60% of its value when compared to its December 2017 high and that Ether [ETH] has declined more than 70% over the past six months.

The company is expecting more to see more decrease in the value of cryptocurrencies in the future as they lay contradictory to their opinion on cryptocurrencies. They stated:

“We expect further decline in the future given our views that these cryptocurrencies do not fulfill any of the three traditional roles of a currency. They are neither a medium of exchange, nor a unit of measurement, nor a store of value. Importantly, we continue to believe that such declines will not negatively impact the performance of broader financial assets.”

The reason the financial giant believes that cryptocurrencies wouldn’t have an adverse effect is they hold only 0.3% of the world GDP at present.

The company in their January 2018 report stated that they believe that Bitcoin has been pushed to into the ‘bubble territory’. The Bitcoin rise in the month of December 2017 rembles the dom.com bubble and that it has already moved past the equity and tulip bubbles.

The report stated:

“We think that the concept of a digital currency that leverages blockchain technology is viable given the benefits it could provide: ease of execution globally, lower transaction costs, reduction of corruption since all transactions could be traced, safety of ownership, and so on. But Bitcoin does not provide any of these key advantages.”

It further states that it is quite opposite to the definition of a digital currency as there is no ease of execution and settlement takes up to 20 days. The company believes that cryptocurrencies will not hold value in the long run with its present status and that it cannot replace ‘Steady as She Goes’ dollar.

The company outlines that the Outlook is published because of the conflict between economic growth and the shift of investors focus towards the unsteady factors such as Bitcoin and cryptocurrencies. The company also states that the return of 7% equity share of the U.S is going as it was planned but the total returns are showing signs of high volatility.

Along with “Bitcoin and the Unsteady Cryptocurrency Mania”, the other unsteady factors which processes a threat are terrorism, geopolitical tension, increasing cyber attacks, the rise of populism and domestic politics.



Follow us on Telegram | Twitter | Facebook



Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Continue Reading
1 Comment

1 Comment

  1. GUS ROBINSON

    August 4, 2018 at 5:57 PM

    I cannot understand how Goldman Sachs, a great out of the box instituion can come up with such misinformed nonsense,”as there is no ease of execution and settlement takes up to 20 days”. I have this morning transferred from Xapo, to Luno and cashed out in South Africa in less than 2 hours!

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement
Advertisement

Trending

Subscribe to AMBCrypto's Newsletter