Haven’t Bitcoin investors suffered enough?
After hitting its $20,000 high in December, things have gone pretty bad for the world’s largest cryptocurrency, with its value now roughly a third of what it was at its peak in 2017. But according to Goldman Sachs’ mid-year economic report, things are only going to get worse for Bitcoin.
In fact, Goldman included Bitcoin and the “unsteady cryptocurrency mania” among the six factors that create an undertow for the U.S. economy. (The other factors are domestic politics, the rise of populism, terrorism, increasing threat of cyberattacks and rising geopolitical threats.)
Goldman notes that it had taken a bearish view of Bitcoin and cryptocurrencies in its 2018 Outlook back in January, and that its “view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected.” To wit: Bitcoin has dropped about 60 percent from the December 2017 high.
Goldman adds:
We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value. Importantly, we continue to believe that such declines will not negatively impact the performance of broader financial assets, because cryptocurrencies represent just 0.3% of world GDP as of mid-2018. In fact, we believe that they garner far more traditional media and social media attention than is warranted.
Bitcoin was trading at $7,472.99 on Friday afternoon in New York.
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