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Bitcoin

Bitcoin May be in for a Further Decline, Predicts Goldman Sachs

In the midyear economic outlook report, strategists of Goldman Sachs have predicted that after falling a major decline in its price value from December 2017, bitcoin is still going to face the downward trend.

According to Sharmin Mossavar-Rahmani, it is stated in the report:

Our 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,

It is added in the report that:

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.

The same prediction of bitcoin declining in its value was also predicted by the firm in the beginning of the year. In the 108-page note released back in January, it was suggested by the firm that investors should be cautious in their movements towards the cryptocurrency market as the market may be seeing a bearish behavior in the future. Led by Brett Nelson and Sharmin Mossavar-Rahmani the group of Goldman executives predicted back in January that:

While we do not know if bitcoin or any other cryptocurrency will double or triple from prevailing prices, we do not believe that these cryptocurrencies will retain their value in the long run in their current incarnation,

Concerning the benefits and advantages of blockchain technology and its linkage with bitcoin, the experts suggest that:

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. Quite the contrary,

It is suggested by the experts at Goldman that although bitcoin if going to face a serious decline even further, but this trend does not pose any threat to the broader financial assets owing to the inadequate affect it has on the world GDP.

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.

The view of bitcoin facing a decline in its value is also shared by another technician of the crypto currency world, Robert Sluymer. According to Sluymer, if the bitcoin does not hold itself above the key level of $7,400 then it is expected to drop to an even low value and this downward trend is going to continue.

Sluymer is of the view that investors should be very careful regarding their stance concerning the crypto market as the market may be facing a serious drop. Sluymer predicted that if bitcoin does not hold the very critical level of $7,400 it will most probably roll down to a low value of $6,000. Investors should be well-prepared to face this drop.

I look here thinking this is where it’s got to stick, this is where you can put the long trade on. But it has to be done with very tight stops because if bitcoin cannot dig in here, then that short-term trend defined by the 15-day moving average begins to roll over and I think it’s vulnerable to a collapse into that $6,000 range.

Although the trend predicted by Goldman and Robert Sluymer is not shared by the Wall Street giant and one of the world’s leading stock exchange, Intercontinental Exchange (ICE). ICE has plans to make bitcoin a mainstream financial asset. ICE has also collaborated with Starbucks to provide it a global framework in order to make it capable of dealing in bitcoin payments. According to Kelly Loeffler, the chief executive officer of Bakkt about to be launched by ICE in collaboration with Microsoft and other industrial giants, Bakkt will be be handle digital assets with high efficiency, security and utility.

Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility. We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.

All in all, the bearish trend that bitcoin is facing is going to continue for the near future as predicted by most of the experts of the crypto space. But its final value by the end of the year is depending upon a variety of factors. These factors include the establishment of a bitcoin exchange traded-fund (ETF) and the need for a regulatory framework concerning the crypto market. As the framework is largely unregulated and insecure, institutional investors hold back from investing the market. Once an ETF gets established with regulatory framework in place, more and more institutional investments will begin to flow in the market taking the value of bitcoin to a new high.

According to Akexis Ohanian, the co-founder of Reddit and the VC of Initialized Capital, bitcoin will hit a value as high as $20,000 by the end of the year 2018.

At the end of the year, Bitcoin will be at $20,000. And Ethereum will be at $15,000 [which he later clarified as $1,500]. Great, now people can call me out if I’m wrong.

As we are in the age of digital currency, people are more inclined towards the ease of use that digital currency provide. So despite the volatility, cryptocurrencies will most probably continue to go up in the near future. Alexis stated that:

As volatile as it’s been, we see it continuing [to go] up over the long term, because more and more people are going to look for alternatives to fiat as a store of value as we see currency fluctuations with states failing and other uncertainty, that makes having a digital store of value like bitcoin something that’s desirable, because you don’t have to worry about withdrawing it from a bank or the value disappearing as a government money.

In a nutshell, although bitcoin might see a sudden upward spike in its value and move towards stability, it is expected to see a further decline from here on before that.

Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

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