Wednesday, Sep 26, 2018

Most cryptocurrencies will hit ZERO, warns top official at Goldman Sachs

Most cryptocurrencies will hit ZERO, warns top official at Goldman Sachs
08 Feb
2018

A new report has warned consumers that most cryptocurrencies - if not all - will fall to zero.

According to Goldman Sachs head of Global Investment Research Steve Strongin, in a February 5 note, most cryptocurrencies will ultimately fall to zero as current iterations are 'too primitive' to be viable in the long term.

Strongin says this is because transactions are costly and lengthy, and cybersecurity issues plague the current cryptocurrency infrastructure.

'Whether any of today's cryptocurrencies will survive over the long run seems unlikely to me, although parts of them may evolve and survive,' Strongin said.

'Because of the lack of intrinsic value, the currencies that don't survive will most likely trade to zero.'

The Goldman Sachs head pointed to the dotcom bubble from the 1990s where early winners fell to make way for today's titans such as Amazon and Google.

'So, 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?' he said.

'Just because we are in a speculative bubble does not mean current prices can't increase for a handful of survivors,' he said. 'At the same time, it probably does mean that most, if not all, will never see their recent peaks again.'

Strongin said that it is possible the future big winner in cryptocurrency hasn't even been created yet.

'Ultimately, I think new cryptocurrencies will emerge but of course time will tell,' he said.

According to the website of cryptocurrency exchange Coinbase, Bitcoin has fallen by more than 37 percent over the past week and by more than 61 percent over the past month.

Other commentators have also cautioned on cryptocurrencies. Noted economist Nouriel Roubini, also known as 'Dr Doom,' tweeted on Tuesday that he believes the price of bitcoin will crash to zero.

Additionally, billionaire Warren Buffett told CNBC in a recent interview that cryptocurrencies will 'come to a bad ending'.

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