The tumble in cryptocurrencies that erased nearly $500 billion of market value over the past month could get a lot worse, according to Goldman Sachs Group’s global head of investment research. 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’s Steve Strongin said in a report dated February 5.
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 coins to move in lockstep wasn’t rational. “The high correlation between the different cryptocurrencies worries me,” Strongin told Bloomberg. “Because of the lack of intrinsic value, the currencies that don’t survive will most likely trade to zero.”
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