Crypto hodlers may not get richer from mainstream adoption — Goldman Sachs


Goldman Sachs claims that the use of Bitcoin (BTC) and cryptocurrencies will not necessarily increase the dollar price.

In a note published by Bloomberg on Thursday, the international banking giant said that the massive use of cryptocurrencies will increase their correlation with other major asset classes.

Goldman: Adoption is a double-edged sword
Contrary to the beliefs of many Bitcoin supporters, Goldman said he was not at all inspired by the prospect of the cryptocurrency as a tool to enrich the masses.

“While this may increase valuation, it is also likely to increase the correlation with other financial market variables, and reduce the diversification benefits of owning an asset class,” the note said.

Its authors, Zach Bundel and Isabella Rosenberg, have also described mass adoption as a “double-edged sword”.

In other words, if bitcoin or cryptocurrency becomes more correlated with existing assets, the chances of uneven returns will decrease.

The comments come as the cryptocurrency markets are already showing a higher correlation to equities this month in particular, and the outlook for 2022 does not support a strong improvement – at least not in the beginning.

However, even Goldman himself has not fully subscribed to a single story, predicting earlier in January that BTC / USD could reach $ 100,000 – somewhat ironically, by stealing market share from gold and thus attracting more from traditional investors.

Easy supply and demand?
Alternative theories about Bitcoin specifically avoid the idea of ​​a correlation that exceeds the return growth given by other factors in the future.

Relative: Overcoming the ‘Bear Market’ Demand for Bitcoin Will Lead to Next BTC Rise – Analysts

Analysts are defending a simple mathematical formula to reduce supply in the face of wider use as a realistic guarantee of higher prices against fiat currencies in the future.

The expected release schedule for Bitcoin, along with the growing number of wallets, is a phenomenon that continues to emerge despite the weak prices in the short term.

Bitcoin wallet addresses with at least 1 BTC compared to the BTC / USD chart. Source: LookIntoBitcoin
Meanwhile, a downturn that began in November has failed to undermine the enthusiasm for large wallets, according to surveillance source Santiment.

Source: CoinTelegraph


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