Right ot Wrong? Goldman Sachs Head Of Research: Prepare For Most Crytocurrencies To Hit Zero

[El Presidente]

According to Goldman Sachs Group Inc.’s global head of investment research, most cryptocurrencies are going to hit zero and soon. Experts claim the recent tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse.

Many analysts have warned that cryptocurrencies have no tangible value. Among them, the analyst who predicted the 2008 recession, Peter Schiff, has said at some point, Bitcoin will be worth its actual value: $0. He also predicted that many investors would lose everything when the Bitcoin bubble pops. Now, Goldman’s Steve Strongin has said something similar.

Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they’re replaced by a small set of future competitors, Strongin said in a report dated February 5 of this year. While he didn’t posit a timeframe for losses in existing coins, he said recent price swings indicated a bubble and that the tendency for different tokens to move in lockstep wasn’t rational for a “few-winners-take-most” market.

Continued 

http://www.shtfplan.com/headline-news/goldman-sachs-head-of-research-prepare-for-most-crytocurrencies-to-hit-zero_02072018

[Davin]

Right.  Fundamentally worth nothing and even if the market assigned it value, only too soon would they would be destroyed by governments.  No way they’re giving up the power of seigniorage.

[TheGipper]

Most?  Yes, of course.  But this is about as bold a prediction as predicting which horizon the sun will rise over five years from today.

This is like saying "most" businesses will go bankrupt.  Or "most" stocks will go to zero.

"Most" business do indeed go bankrupt or at least shut down.  "Most" stocks do indeed go to zero*.  But the winning businesses and stocks more than make up for the ones that don't survive.  We will see if the same ends up being true for cryptos.

*- (There are at least 15,000 stocks that are not traded on major exchanges and are essentially worth zero.  And there are tens of thousands more over the many years that have been completely de-listed and are literally worth zero.  It's the nature of business.)

 

[GasGuy82]

Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they’re replaced by a small set of future competitors

Goldman Sachs wouldn't happen to have a strong position in these "small set of future competitors" would they? Not that I have a horse in the race nor am particularly concerned, however, when one has the ability to influence the market...

[bman75]

These currencies are extremely overvalued, but their value is not zero.  The are a useful medium of exchange for markets where normal currencies are not an option.  It works well as a "naughty" currency when cash isn't an option. 

[Philc2001]

Ahh the banksters! What else would you expect from one of the biggest cheats that caused the Great Recession of 2008? Does anyone really trust the word of GS or any of their partners in one of the world's most notorious scams? Seriously? 

The fact is the Banksters can't figure out how to get cryptos under THEIR control, so they have to find a way to kill 'em. Banksters hate cryptos because cryptos can't be manipulated and controlled like fiat currencies, and crypto make it abundantly clear that we don't really need banks, they are the real manipulators and fraudsters.  

 

1 hour ago, El Presidente said:

Experts claim the recent tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse.

A drop in the bucket compared to the $3 trillion wiped out last week on the US Stock Exchanges.

http://time.com/money/5140335/dow-correction-trillion-dollar/

[rguinn]

FUD from banks. Go figure. Meanwhile Arizona announces they’ll allow tax payments using multiple forms of crypto and pretty much all countries rumored to kill crypto have come out and categorically denied it. The US regulatory committee just came out last week stating crypto is here to stay. Large companies like Microsoft, Starbucks, IBM and Overstock are jumping on the Blockchain.   

Is crypto volatile, yes. Are some coins scams or just won’t make it in the long run, yes. Should there be stronger regulations...perhaps. But to deny the technology, the demand for a decentralized form of currency or the benefits to society and businesses is ridiculous. 

To those interested in jumping into crypto - do your due diligence before buying. Study the coin/leadership/project. Invest in tech you believe in. Find the trends in the market and buy lows and hold. 

[fastkiller13]

Bitcoin will never hit zero, nor eth and a few others. Goldman is dumping millions and millions into crypto development so it makes perfect sense to say BTC will be worthless but a few futures, read our futures, will have value.

Most investors in Bitcoin are people on the margins. They don’t play the market, remember when your Grandparents kept gold and silver coins stashed away for a rainy day because they didn’t trust the banks? Well now the people who are holding crypto are doing it for the same reasons. 

Stock market falls 15% and it’s just a correction. Crypto drops and it’s the end of the world. I remember way back in 2013 when the bitcoin is dead trend started. Yet it’s still here stronger than ever. 

Also worth considering is the fact that most big holders in crypto have been there for a long time. So if you bought something at .08$ or even 450$ and it was now worth 20k with a bunch of idiots clamoring for it wouldn’t you sell, wait until it comes down and buy it back? 

How often has Goldman overvalued a stock then dump it and buy it back again. It’s the way the stock market works. Zero sum games need fresh blood. Crypto is certainly more openly vicious, but just because someone has fancier clothes, a nicer car, and can more coherently tell you you’re screwed doesn’t mean they’re any different. 

[NSXCIGAR]

3 hours ago, fastkiller13 said:

Bitcoin will never hit zero, nor eth and a few others.

Well, the Zimbabwe dollar still has some value, but...

All currency not composed of or explicitly backed by hard assets will eventually go to zero or close to it. However, the time horizon is so long and unknown it's academic to state that it will. 

I wouldn't put it past the large brokerage firms to talk the cryptos down for purely selfish reasons. Don't buy crypotos--they suck, buy stocks. Might be that simple. 

[SloppyJ]

Had a nice rally today. 2018 will see record prices again, I'm sure of it. Hopefully that crash will end up culling out a lot of the alt coins that are purely scams. 

If you want to break it down there most certainly is something backing up most of the coins and it's the equipment and energy costs that miners must take on to support the network. 

Glad we have a crypto post up on the board. I've been pretty deep into it for about a year now and it's something that I follow closely every day. I've been debating about making a thread for a few months now but didn't think there would be much interest. 

[LordAnubis]

There already is a crypto thread isn’t there?


Sent from my iPhone using Tapatalk

[rguinn]

37 minutes ago, NSXCIGAR said:

Well, the Zimbabwe dollar still has some value, but...

All currency not composed of or explicitly backed by hard assets will eventually go to zero or close to it. However, the time horizon is so long and unknown it's academic to state that it will. 

I wouldn't put it past the large brokerage firms to talk the cryptos down for purely selfish reasons. Don't buy crypotos--they suck, buy stocks. Might be that simple. 

There are numerous scare tactics going on within the market, both crypto and household stocks as well. Manipulation is real. Those that hold the most or can afford to will do what is within their power to lower the price in order to make bulk purchases and capitalize on the rebound. The one thing they can’t manipulate is the development and innovation! This should’t be about a money grab, but more about changing business, government and the way we transact and interact with tech. 

[NSXCIGAR]

29 minutes ago, SloppyJ said:

If you want to break it down there most certainly is something backing up most of the coins and it's the equipment and energy costs that miners must take on to support the network. 

That's nothing more than labor theory of value.

I can use a ton of energy and equipment to dig a huge trench in the desert that benefits no one. Doesn't make the trench valuable.

As I've said in other threads, I believe the value in cryptos lies in the blockchain technology, not in the cryptos themselves--especially when considered media of exchange. Better than fiat currency, sure, but not that much better.

 

[TheGipper]

2 hours ago, NSXCIGAR said:

All currency not composed of or explicitly backed by hard assets will eventually go to zero or close to it. However, the time horizon is so long and unknown it's academic to state that it will.

Well, by that standard, everything under the sun (including gold) will have zero value 5 billion years out once the sun expands to consume the earth.

But that's not exactly a bold or insightful prediction.

[Philc2001]

9 hours ago, NSXCIGAR said:

All currency not composed of or explicitly backed by hard assets will eventually go to zero or close to it. However, the time horizon is so long and unknown it's academic to state that it will. 

Assets are only valuable if someone wants them, but none the less, what do you think backs US or the other G20 currencies? What backs treasuries? We haven't been on the gold standard for multiple decades, and aside from a government agency effectively tracking how much currency is in circulation at any given moment, how does anyone know what the currency is worth? Moreover, since most government Feds can print and manufacture money on a whim and literally out of thin air, what makes a fiat currency any more significant than a crypto currency based on a public blockchain that is impossible to break or manipulate (at least by currently know methods)?

[earthson]

14 hours ago, GasGuy82 said:

Most digital currencies are unlikely to survive in their current form, and investors should prepare for coins to lose all their value as they’re replaced by a small set of future competitors

Goldman Sachs wouldn't happen to have a strong position in these "small set of future competitors" would they? Not that I have a horse in the race nor am particularly concerned, however, when one has the ability to influence the market...

13 hours ago, Philc2001 said:

Ahh the banksters! What else would you expect from one of the biggest cheats that caused the Great Recession of 2008? Does anyone really trust the word of GS or any of their partners in one of the world's most notorious scams? Seriously? 

The fact is the Banksters can't figure out how to get cryptos under THEIR control, so they have to find a way to kill 'em. Banksters hate cryptos because cryptos can't be manipulated and controlled like fiat currencies, and crypto make it abundantly clear that we don't really need banks, they are the real manipulators and fraudsters.  

This and that.

These parasites are investing in blockchain technology to eventually debut their own crypto/funny money, so there must be some kind of value to this type of currency, despite the mud they're slinging.  It's not so far-fetched to assume that they're just trying to get Bcoin/Bcash investors to jump ship to something "backed by the full faith and credit of Goldberg Sachs."  It's ALL fiat and backed by nothing but blips on a computer server hidden away somewhere.

[gmoney]

Been away from cigars for about a year bc Crypto caught my Interest about the same time.  Bitcoin acts like a commodity (gold,silver,) and as we leave this current fear cycle that’s why we saw BTC eat golds lunch.  Guys like peter schiff........I’ll just say follow the money. He makes his buy selling gold. I imagine  he didn’t like getting his butt kicked by crypto this last cycle.  If you are not long BTC yet you will have an opportunity around 3-5k in the next two months or so.  (My opinion of course)

 

 

[Iznogood]

10 minutes ago, gmoney said:

Guys like peter schiff........I’ll just say follow the money.

My thoughts exactly.

[BrightonCorgi]

I believe Goldman Sachs and would not touch a crypto currency.  Will stick with William Devane and buy my gold from Rosland Capital.

[SloppyJ]

10 hours ago, NSXCIGAR said:

That's nothing more than labor theory of value.

I can use a ton of energy and equipment to dig a huge trench in the desert that benefits no one. Doesn't make the trench valuable.

As I've said in other threads, I believe the value in cryptos lies in the blockchain technology, not in the cryptos themselves--especially when considered media of exchange. Better than fiat currency, sure, but not that much better.

 

I totally understand and agree with your point. However, in crypto's case, the labor or input is the sole reason that the blockchain is running. No proof of work (POW) blockchains could run without a mining network to verify the blockchain itself. So in essence, if you believe that blockchain technology has value, then I would think you would agree that the costs associated with keeping the blockchain "online" are certainly worth something. But I will concede that the prices of the actual currencies are almost, if not, 100% speculative. However, by purchasing these coins, you're "betting" on that team/blockchain/use-case. As a long term outlook, I wouldn't be surprised if only 5% of the current cryptos actually survive. Most have very ambitious use cases that are likely never to take off and gain real world traction. 

On one hand I like proof of work chains because they allow me to mine the coin and get paid in that currency for helping to keep their chain running which is extremely selfish. However, I do not think it's sustainable and I think it's highly irresponsible in environmental terms. I think the future of blockchain technology has to be in proof of stake (POS) coins. 

A lot of cryptos hold initial coin offerings (ICOs) which are almost the same as IPOs in stock terms. They are used to acquire capital to build their platform. In my opinion, this has gotten out of hand due to the decentralized nature of crypto/blockchain technology. Normally these are held on the Ethereum (ETH) platform which is the #2 coin in terms of market cap. ETH is a proven platform that is based on "Smart Contracts". I could start a SloppyJ coin that will have a 900 million coin circulating supply. I would hold an ICO and say that if you send me 1 ETH, I will give you 10,000 SloppyJ coins. All the while, I'm working with one of the smaller exchanges to get my coin listed on their exchange so once my coin goes live, the coin can be traded. There really is no obligation for me to do anything else at this point other than make sure my ICO meets its fundraising goals so my contract is executed on the Ethereum platform and my coins are distributed to the "investors". Once the contract is executed I have already acquired a lot of ETH from the ICO and I sell the remaining SloppyJ coins on the exchange. I just became a millionaire. 

Since fiat is used to enter the crypto market, this has gotten the attention of regulators that are looking to protect their citizens. There are now some pretty strong limitations on ICOs for Americans. It's a HIGHLY unregulated market right now that is and will continue to be manipulated for personal benefit. There are some noble cryptos out there for sure. But for every one of those, there are hundreds of "scam coins" in my opinion.

Long story short, the vast majority of the current crypto offerings have nothing to back them up and are purely speculative. IMO, BTC is here to stay due to it being the catalyst that started this entire deal. Ethereum is a legitimate crypto that has a wide range of uses to execute contracts. Litecoin has proven useful to me as an everyday crypto that can be used to pay for items due to its quick transactions and low fees. Other than that, it's all anyone's guess. 

[PaulP]

https://www.marketwatch.com/story/the-ecb-just-illustrated-all-the-key-problems-with-bitcoin-in-one-simple-chart-2018-02-13

[NSXCIGAR]

14 hours ago, Philc2001 said:

Assets are only valuable if someone wants them, but none the less, what do you think backs US or the other G20 currencies? What backs treasuries? We haven't been on the gold standard for multiple decades, and aside from a government agency effectively tracking how much currency is in circulation at any given moment, how does anyone know what the currency is worth? MorIeover, since most government Feds can print and manufacture money on a whim and literally out of thin air, what makes a fiat currency any more significant than a crypto currency based on a public blockchain that is impossible to break or manipulate (at least by currently know methods)?

I agree--fiat gov't currencies are backed by nothing. That's why I've said I think cryptos can actually be superior. At least their supply is nominally limited whereas gov'ts can just print to infinity. I just think both are fatally flawed long-term.

 

21 hours ago, TheGipper said:

Well, by that standard, everything under the sun (including gold) will have zero value 5 billion years out once the sun expands to consume the earth.

But that's not exactly a bold or insightful prediction.

Yes, that was somewhat my point. The US dollar is still going strong after 104 years of being backed by nothing so what is long-term really? Yes, all fiat currencies will become virtually worthless as will the cryptos but when? Too far out for it to mean anything as GS would suggest. 

13 hours ago, earthson said:

so there must be some kind of value to this type of currency, despite the mud they're slinging.

Value and money to be made are two different things. There was plenty of money to be made in tulips in Holland in the 1630s. I just don't put much stock into many bold predictions made by large commercial banks of brokerage firms, most of which should have gone belly up in 2008. 

 

10 hours ago, SloppyJ said:

So in essence, if you believe that blockchain technology has value, then I would think you would agree that the costs associated with keeping the blockchain "online" are certainly worth something.

The value in the blockchain is in it's usefulness. Similarly, the internet's value is not determined or based on the amount of energy and resources it takes to keep it running. Valuing cryptos over the blockchain is like valuing websites over the internet. Yes, websites have value, but websites come and go. The internet is what makes the websites usable and viable and allows them to have value. The blockchain can accommodate things other than cryptos and who knows what potential it has beyond cryptos. I consider the two related but totally different in nature. Like websites, cryptos will come and go but much like the internet the blockchain isn't going anywhere.

10 hours ago, SloppyJ said:

IMO, BTC is here to stay due to it being the catalyst that started this entire deal.

That's just impossible to say IMO. History is littered with products and companies that dominated the market becoming worthless and unknown. If a superior crypto came on the scene and caught some steam people would totally desert BTC so fast it would be astonishing. When there's open competition creative destruction is virtually inevitable. 

[BarryNY]

Hi.  No endorsement either way - just a good read...

2018 – Year of the “Crypto Fiat” Currency _ Bonner & Partners.pdf