Goldman Sachs: Most cryptocurrencies will plunge to zero

Cryptocurrencies are driving people crazy, despite its roller-coaster value and some efforts from global governments to ban the use of digital money. Everyone loves investing on it. Even they are willing to do anything to buy it.

But nothing is perfect in this world, including in financial market. Goldman Sachs predicts that most digital currencies will dive to zero. The company compared crypto’s hype to the internet bubble in the 1990s.

Cryptocurrency market slipped to the lowest point Tuesday. Bitcoin, the most popular virtual money, plunged to below $6,000 for the first time since November. Bitcoin reached its all-time record of nearly $20,000 in December.

Bitcoin bounced to $8,400 on Wednesday, up 9.5 percent, CoinDesk reported. Other cryptocurrencies saw a significant climb Wednesday. CoinMarketCap stated Ethereum jumped 5.6 percent to $838 and bitcoin cash rose to 4.8 percent.

According to Steve Strongin, head of Goldman Sachs global investment research, cryptocurrencies will not survive in the long-run due to the fact that they do not have intrinsic value.

"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. Contrary to what one would expect in a rational market, new currencies don't seem to reduce the value of old currencies; they all seem to move as a single asset class," Strongin said in a note.

What experts say about the phenomenon of digital money

Despite receiving harsh criticism, other experts are confident that cryptocurrency market will reach $ 1 trillion this year, with bitcoin surges to $50,000.

The rapid development of technology and increasing recongition of regulatory exchanges will help the digital cash market to rebound and drive cryptocurrencies to the highest level at the end of 2018, stated Thomas Glucksmann, head of APAC business development at cryptocurrency exchange gatecoin in his email to CNBC Tuesday.

But not all billionaire in this world love cryptocurrency. Investor Carl Icahn said he does not like virtual money, saying because he may not understand cryptocurrencies. He called bitcoins and its rivals “ridiculuous”.

Icahn is a well-known investor who was once President Trump’s advisor. But the billionaire resigned in August. News Wire & Equity Research: +31 084-0032-842

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