According to Goldman Sachs Group Inc.’s global head of investment research, most cryptocurrencies are going to hit zero and soon. Experts claim the recent tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse.
Many analysts have warned that cryptocurrencies have no tangible value. Among them, the analyst who predicted the 2008 recession, Peter Schiff, has said at some point, Bitcoin will be worth its actual value: $0. He also predicted that many investors would lose everything when the Bitcoin bubble pops. Now, Goldman’s Steve Strongin has said something similar.
Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they’re replaced by a small set of future competitors, Strongin said in a report dated February 5 of this year. While he didn’t posit a timeframe for losses in existing coins, he said recent price swings indicated a bubble and that the tendency for different tokens to move in lockstep wasn’t rational for a “few-winners-take-most” market.
“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.” –Steve Strongin
According to Strongin, today’s digital coins lack long-term staying power because of slow transaction times, security challenges, and high maintenance costs. He said the introduction of regulated Bitcoin futures hasn’t addressed those concerns and he dismissed the idea of a first-mover advantage, noting that few of Internet bubble’s high fliers survived after the late 1990s. “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,” Strongin said. “At the same time, it probably does mean that most, if not all, will never see their recent peaks again.”
As previously reported by SHTFPlan, Peter Schiff’s main concern with Bitcoin echoes that of many preppers, including Mike Adams, the Health Ranger. “These currencies are going to trade to zero or pretty close to it when the bubble pops,” predicts Schiff. “Right now, the only reason why people are buying bitcoin is because the price is going up. When it turns around, they are not going to sell it for the same reason. There is no value in bitcoin, you can’t use it as money,” Schiff points out. “It’s too slow, too expensive and too vulnerable.”
Analysts all seem more positive about the prospect of the Blockchain technology than they do a cryptocurrency.