According to Steve Strongin, an expert at Goldman Sachs Group Inc., the vast majority of the cryptocurrencies will hit zero. Strongin did not specify the timeframe but said that huge fluctuations in prices in the class of digital assets were a sign of a soap bubble.
“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.”
This week, the cryptomarkets have experienced chaotic sales, while the total market capitalization has fallen by 550 billion dollars. In recent days, a number of unfavorable events for digital currencies have occurred: some large banks, such as JPMorgan Chase, Bank of America, Citigroup, Lloyds Banking Group and Virgin Money, have banned the purchase of the cryptocurrency through their credit cards; the cryptocurrency market has faced constraints in India and China; Facebook and Instagram have prohibited digital currencies advertising, etc. In this regard, the most popular cryptocurrency Bitcoin has lost a quarter of its value.
Steve Strongin, however, points out that not all cryptocurrencies will disappear – there will be several leaders on the market. The price of those cryptocurrencies that will survive may still increase. But it is difficult to say exactly which digital currency will remain in the end. The expert compares the existing cryptocurrencies with the first Internet search engines, which now aren't in operation since they were replaced by more efficient systems.
Despite the pessimistic attitude to cryptocurrencies, Strongin sees the future behind the technology of blockchain, which can improve financial accounting. Though, he is afraid that this modern technology does not yet offer the speed sufficient for making market transactions.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.