Goldman Sachs analysts believe that bitcoin is a bubble bigger than the dot-com era financial collapse.
In a letter to investors, banking firm Goldman Sachs’ analysts warn about the increase in cryptocurrency values, notably the price jumps in bitcoin and ether, in addition to the stock price increases for companies who adopt blockchain technology.
What set out to become a global, unregulated, fast and easy currency, Sachs analysts believe bitcoin has become marred by obscene trading fees and transfer times that can take over a week to process. Instead of using bitcoin as a currency to buy goods and services, the majority of people tend to sit on their bitcoin in hopes of a profitable, long-term investment.
The Goldman Sachs report states,
“We think the concept of a digital currency that leverages blockchain technology is viable given the benefits it could provide: ease of execution globally, lower transaction costs, reduction of corruption since all transactions could be traced, safety of ownership, and so on. But bitcoin does not provide any of these key advantages.”
Wall St. firms and insiders have criticized cryptocurrency’s viability in the past, yet markets continue to see record highs.
That being said, this is another in a long list of warnings to invest responsibly.