Goldman Sachs: Most Cryptocurrencies To Hit Zero

Written by: Cai Huiling Created: 08 February 2018

It Might Be Time To Rethink Investing In Digital Coins

The prices of most, if not all cryptocurrencies currently on the market are expected to continue plunging, says Goldman Sachs.

According to the Bloomberg Q&A report on February 5^th with Goldman Sachs head of Global Investment Research, Steve Strongin, most cryptocurrencies are predicted to ultimately fall to zero. Current iterations of digital coins were said to be “too primitive” to be viable in the long term. Transactions are too costly and lengthy, and cybersecurity issues plague the current cryptocurrency infrastructure that even the regulation of Bitcoin futures hasn’t been able to address. 

Investors should prepare for coins to lose all their value as they're replaced by future competitors.

"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." 

Strongin also dismissed the idea of a first-mover advantage - highlighting how only a few of the Internet bubble's initial high fliers actually survived the dotcom bubble of the late 90s. Many of the early winners then such as Pets.com and eToys.com went bust before today’s titans like Amazon and Google rose to replace them.

While Strongin was more optimistic about the blockchain technology underlying the digital currencies, he cautioned that the current technology still has a long way to go and lacks the speed required to conduct market transactions.

Written by: Cai Huiling

Huiling covers a diverse range of topics at Billionaire, fuelled by her passion for environmental sustainability and humanitarian advocacy. In her downtime, she enjoys getting lost in a good book and tending to her urban garden.