Bitcoin Watch – Goldman Sachs weighs in on Bitcoin phenomenon

At the beginning of 2017, the highly volatile Bitcoin was valued at just below USD1,000, however recently it has skyrocketed well into the teens at a high of over USD19,000.

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Leading global investment banking, securities and investment management firm, Goldman Sachs has warned that bitcoin is a bubble bigger than the dot-com era. In a research letter to investors, analysts said: “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. A single bitcoin transaction can take up to 10 days to process, and the value of a single bitcoin varies depending on which exchange a user conducts their transaction through, according to the report. There was a greater than $4,000 difference in the price of a bitcoin between different exchanges at the same time late last year”.

Despite this, Goldman Sachs do not believe a collapse in bitcoin prices would have “major contagion effects on the global economy or financial markets,” concluding that “we view the unsteady cryptocurrencies as no match for the ‘Steady as She Goes’ dollar.”

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