What is the real value of bitcoin? Goldman Sachs insists that meets the characteristics of a bubble

What is the real value of bitcoin? Goldman Sachs insists That meets the Characteristics of a bubble

The investment bank does not bet for survival of the current generation of coins encryption.

The company led by Lloyd C. Blankfein emphasizes its commitment to blockchain technology and its potential in the future.

The eternal question. Everything that can be eternal in a market that has become ‘mainstream’ in recent months. Do they have real value the criptodivisas? And if they do, how I could calculate? The answer to these two fundamental issues makes a difference to analysts at Goldman Sachs, between what could be considered “a bubble in the pop or a technological breakthrough so transforming its true value has not been yet reflected in its price market”.

The perfect parable have drawn bitcoin prices and the rest of coins in almost three months encryption is on everyone’s lips. Many voices sow alarm and ensure that, with a correction of 70% in the price of the queen of virtual currency and a bite of half a trillion dollars in market capitalization over 1,500 tokens and existing coins, the prick It is in process. Other analysts, especially chartists, warn that this is a “healthy and necessary” price correction.

The division ultimately remains among the stalwarts of coins encryption, looking beyond the roller coaster of prices and who warn that ‘crypts’ as we know them are nothing more than pure speculation. “The criptodivisas are extremely volatile, and something that can multiply its value by 10 in six months, can easily drop 50% in a week, but it’s hard for me to believe that we are in a bubble,” says Dan Morehead, founder and CEO of Pantera Capital.

The operator crypto currency, said “the capacity to transform the world we know of these assets is important enough to steal a part of the pie to banks, payment companies with gold cards credit, foreign exchange and, implying that fair value is well above recent peaks, “said the expert investment firm in virtual currencies.

CRIPTODIVISAS PRIMITIVE

Analysts at Goldman Sachs, however, say they are “more skeptical” because the bitcoin and other assets encryption “are capable of solving economic problems only in rare cases”, explained in a comprehensive report on the nature of this young and fickle market. They insist on the “bubble characteristics of this type of investment and the obstacles presented for traditional investors.” Finally, Steve Strongin, head of research at investment firm on Wall Street predicts that “the current generation of crypto currency has no chance of survival in the future, although the technology blockchain endure.”

Compare Strongin chain blocks Internet in its origins and explains that, as search engines have evolved since the late 90s, chances are that digital currencies follow the same fate. Equating is not free, gurus blockchain define this platform as “new Internet”, but do not deny that much work needed to ensure speed, reliability and transparency of transactions that are hallmarks, along with the decentralization of this paradigm.

The bitcoin and other current tokens and coins are “the first modern experiments blockchain technology,” insists Strongin, for whom “are still too primitive to Serla long-term response.” Therefore, it predicts that “a new generation of ‘crypts’ will emerge in the future, but only time will tell when and how”.

IS IT OR IS NOT A BUBBLE?

Also believes the head of research at Goldman Sachs on the initial issue of fair value of these assets, “like fiat currencies, have no real intrinsic value, but that does not mean that people do not try to ‘crypts’ as if they did, and sometimes for sustained periods of time. ” A clear signal that have toughened their stance on these investments.

In January, the company led by Lloyd C. Blankfein moved from its previous state of “vigilance” to launch a stern warning against the tremendous growth experienced by the bitcoin or ethereum. In an earlier note, analysts Sharmin Mossavar-Rahmani and Brett Nelson already expressed “no doubt” that the astronomical rise of cryptocurrency over the past year “has pushed the territory of the bubble.”

In the current report, also analysts Charlie Himmelberg and James Weldon abound in this idea and, just to start recall that in his book “Irrational Exuberance”, Robert Shiller provides a definition of what a ‘bubble’: “A situation which stimulates price increase investor enthusiasm that spreads among individuals following a pattern of psychological contagion. A process that amplifies stories that could justify price increases and attracts an increasing number of investors who, despite doubts about the real value of the investment, attracted partly through envy that arouse the successes of others and partly by the excitement of the game. “

“While there is no definitive taxonomy for bubbles, defining Shiller is as good as any,” they write. “And if you are looking for examples of recent price action and investor behavior that fit this profile, it is hard to imagine a better example than the bitcoin and the broader ‘altcoins’ universe,” they say.

“Price action to stimulate investor enthusiasm? Fulfills it. ¿Psychological contagion? You cumple¿Dudas on its fundamental value? Fulfills it. Envy the successes of others and the excitement of the game? Met and fulfilled, “they add.

Place particular emphasis on that in addition to “exponential rise in prices and the rise of trade volume it had since last fall telltale signs of social contagion”. A new class of inexperienced, Millennial and advanced user profile Internet search engines investor flooding, especially Google and created ‘trending topics’ on Twitter. And the stocks of companies that changed their names to include the words ‘cryptos’ or ‘bitcoin’ are doubled or tripled.

Of course, “the fact that the ‘crypts’ fit at all points list Shiller does not invalidate the underlying technology,” punctuate Himmelberg and Weldon. And throw

 

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