Goldman Sachs in its new report warns of bitcoin bubble

Goldman Sachs in its new report warns of bitcoin bubble

Goldman Sachs says that bitcoin is a bubble, which by its scale exceeds the dot-com bubble and the famous Tulip fever in Holland.

In a letter to investors, analysts banking firms warn of increase in the values of cryptocurrencies, focusing on changes in the prices of bitcoin and ethereum, but also on the rise in the stock prices of companies engaged in the field of blockchain.

One example is, The Crypto Company, the price of its shares increased by 17,000 percent before the U.S. Commission on securities and stock exchanges suspended trading.

The authors believe that this universal mania is, in its own way is amazing because the world’s largest cryptocurrency by market capitalization – bitcoin is not fulfilling the role, which she stated.

We believe that the concept of a digital currency that uses blockchain technology is viable given the benefits it can provide: easy work at the global level, to reduce transaction costs, reduction of corruption, since all transactions can be tracked, security, ownership, etc. But bitcoin is none of these key advantages.

One bitcoin transaction can take up to 10 days for processing, and the cost of one bitcoin varies depending on the exchange rate what exchange the user is conducting the transaction. The authors add that the price difference on BTC between different exchanges at the end of last year was more than $ 4,000.

The report mentions another problem – the high transaction costs.

However, despite the inflation of bitcoin and other cryptocurrencies, the risk that they will affect the us or global economy, even in the case of total collapse – no. Cryptocurrencies are just a small part of GDP in the USA and worldwide (3.2 percent and 0.8 percent, respectively), the dot com bubble was much larger.

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