Steve Strongin has added his voice to the anti-cryptocurrency chorus coming out of the finance industry. The head of global investment research for the financial giant Goldman Sachs asserted on February 5, 2018, that most, if not all, cryptocurrencies are destined to fall to zero in value.
Stating that cryptocurrencies had no “intrinsic value” and did not exist in a “rational market,” Strongin compared them to the infamous dot-com bubble. In the late 90s, a great deal of investors made speculative investments in the fresh wave of emerging internet businesses, only to see them crash as a great many of these businesses failed and floundered.
Strongin expressed his opinion that in the long term, most of today’s digital currencies would likely suffer the same fate:
“People seem to be trading cryptocurrencies as though they’re all going to survive, or at least maintain their value. The high correlation between the different cryptocurrencies worries me.”
He added that unlike in other markets, new currencies did not seem to devalue old ones, but that they all seemed to move as a whole, thus pushing them all gradually downward.
As most cryptocurrency traders well know by now, this attitude is not a new one among the major financial industries. Such significant figures as Agustin Carstens of the BIS and Jamie Dimon of JPMorgan have similarly called into question the long-term sustainability of cryptocurrency, as well as the integrity of its major traders.
Nor is it a new attitude on the part of Goldman Sachs themselves. In late 2017, they were already voicing their disagreements with optimistic investors who were nicknaming cryptocurrencies “digital gold.”
Goldman cited such factors as the volatility of cryptocurrencies and their vulnerability to hacking as reasons to consider them far less reliable means of value storage than the precious metals they were being compared to.
And indeed, this wave of backlash against cryptocurrency that Goldman Sachs is riding does come at a time when even the most optimistic cryptoasset investors are struggling to maintain their faith in the future of cryptocurrencies. 2018 has been a grim time for digital currency investors, with bitcoin alone plummeting to less than a third of its value since mid-December.
A Bigger Game
With that said, many are already skeptical about just how genuine Goldman Sachs’ anti-cryptocurrency sentiments may truly be.
Pointing to two separate stories published by the Wall Street Journal and Bloomberg, observers have highlighted that despite their long-running attitude of supposed cryptocurrency skepticism, Goldman Sachs is nonetheless pressing forward with its plans to establish a multi-billion dollar cryptocurrency trading desk. According to Bloomberg, they hope to have this desk up and running by June, if not sooner.
With this in mind, there is widespread belief that Goldman Sachs is one of the groups looking to take advantage of volatile cryptocurrency prices.
After all, though bad for early adopters, the crash offers a promising opportunity for those who wish to seize the assets in time for the upward resurge in prices that many believe is around the corner.
Simply put, there is plenty of reason to see Goldman Sachs’ derisive attitude toward cryptocurrencies as merely an effort to push their prices down further still, as it would ensure maximum profitability – and perhaps even some level of monopoly – for Goldman Sach’s investments when cryptocurrencies appreciate in value once more.
Source: BTC Manager