Goldman Sachs’s investment management division wrote to clients that there is “no doubt” that the cryptocurrency’s astronomical rise over the past year “has pushed it into bubble territory.”
The firm added that bitcoin’s “meteoric rise in a short time has dwarfed the rise seen during the dot-com bubble.” They added: “We also believe that cryptocurrencies have moved beyond bubble levels in financial markets, and even beyond the levels seen during the Dutch ‘tulipmania’ between 1634 and early 1637.”
“While we do not know if bitcoin or any other cryptocurrency will double or triple from prevailing prices, we do not believe that these cryptocurrencies will retain their value in the long run in their current incarnation,” Goldman continued.
“We think the concept of a digital currency that leverages the blockchain technology is viable given the benefits it could provide: ease of execution globally, lower transaction costs, reduction of correction since all transactions could be traced, safety of ownership, and so on,” Goldman wrote. “But bitcoin does not provide any of these qualities.”
-RW
(via MarketWatch)
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