Reading time: ~2 m
Goldman Sachs believes that the rise in popularity of bitcoin among private and institutional investors will not protect the price of the coin from a collapse.
According to Bloomberg, bitcoin price fluctuations correlate with changes in the value of technology stocks, gold and oil. According to Goldman Sachs strategists Zak Pandl and Isabella Rosenberg, this phenomenon is due to the increase in demand for bitcoin.
Correlation between changes in the cost of bitcoin, gold and the value of the S&P 500 index
The recent collapse in the value of cryptocurrencies is evidence that the massive use of digital assets is a double-edged sword.
Widespread acceptance of virtual currencies may increase their value, but at the same time strengthen the relationship between the crypto market and other financial markets, thus reducing the attractiveness of digital assets as tools for investment diversification, Pandl and Rosenberg said.
Zach and Isabella suggest that the price of bitcoin and other virtual currencies collapsed due to plans by the US Federal Reserve to increase the federal funds rate due to rising inflation. This fact has affected the cryptocurrency market due to the large number of users of digital assets.
According to strategists, the value of coins will grow due to the development of blockchain technology and the creation of metaverses. However, the integration of cryptocurrencies into society will strengthen their dependence on macroeconomic factors, for example, changes in the monetary policy of central banks.
It must be assumed that by society they meant professional traders who tend to buy and sell assets with high frequency depending on market price fluctuations.
#spread #bitcoin #guarantee #price #collapse
