Goldman Sachs issued a somewhat sobering statement on the matter of the cryptocurrency industry and its potential valuations. Analysts over at Goldman Sachs have stated that they believe that the industry will not be moving past the current point that it is sitting at right now. This essentially implies that the industry will not go back to its all-time highs that are experienced over the course of November and December.

Other commenters on the market have stated that they see the price of Bitcoin going up in value to $34,000 or even $50,000 by the end of this current year. And as we’ve seen in the current markets, if the price of Bitcoin goes up, other altcoins eventually follow. A current example would be, at the time of this writing, Bitcoin is sitting at a price of $8,393.00, and Ether is sitting at ten percent of that at $835.00. At the current moment, it does seem like several altcoins are keeping their value and on track to head to their prior levels. For example, Ripple, Litecoin, and Neo keep retaining value while fighting to reach prior all-time highs. There is significant volatility in the cryptospace, a space that moves 24/7, so always make your moves accordingly.

Goldman Sachs seems neutral, inching toward bearish on crypto

Despite the fact that there are these other calls and raises in potential prices made by these other analysts, portfolio managers and businesspeople in the space, Goldman Sachs seems not to agree with these sentiments. Analysts at Goldman Sachs might be seeing that there are significant challenges in the industry, which need to be overcome, for it to survive and flourish in the long term. Their lead research associate, Steve Strongin has noted in a report that several cryptocurrencies may not succeed in the short term and that the state of cryptocurrencies might get worse over time. He further stated that many cryptocurrencies in the market at the moment would not be able to survive if they seek to have the same form are looking to continue in the same path that they are on currently. This would imply that, if the prediction is accurate, those who are invested in these sort of cryptocurrencies will find their investments greatly shrink in value, or in the worse cases, find their investments decimated.

Further Details

Furthermore, he might have made more comments in things that some may perceive as fear, uncertainty, and doubt (FUD). He doubled down on his statements by saying that instead of a minor correction in the markets, the price drop only goes to show that this is a rather frothy market, adding to the bear thesis that this is a bubble.

The high correlation between the different cryptocurrencies worries me. Because of the lack of intrinsic value, the currencies that don’t survive will most likely trade to zero.

He added to his thesis by stating that different issues like that lack of speed and the increase of security issues, concerns him, in regards to the values and the strength of the market.

The representative inquired:

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

What are your thoughts? Why do you think he’s right? Why do you think he’s wrong?