Today, I've had a discussion about this 2-week-old news about Goldman Sachs stating that most cryptos will go down to zero and become worthless. I strongly disagree with that, so I wanted to make a short statement here saying why. You can read the original post here.
Cryptos represent networks
Cryptocurrencies fuel networks, not companies. Why that matters, can be observed when a publicly listed company files for bankrupcy. Its stock basically goes down to zero (or at least close) immediately.
However, networks don't go out of business just like that. Most of the crypto-fueled networks don't depend on a single company to work and survive, so as long as there are some users interested in the survival of the network, the token will not go down to zero.
Cryptos are liquid
Unlike many other investment methods, cryptos are really liquid as exchanges can simply decide to trade them, so there is always a place to trade a certain coin for something else of value and back.
Cryptos interoperate
A similar argument can be made regarding the number of cryptos and why their large number is not an issue at all.
- If you consider tokens as something like stocks, there can easily be thousands and thousands of them.
- However, unlike stocks, they can easily be transformed into each others (see above) and the networks they're powering can interoperate without having to compete or merge. This is similar to how API-first startups don't need to be put together as one company or service to provide supreme user experiences.
Delisting
An exception to those mechanisms are cases where coins get delisted from all (major) exchanges. A very good case for that has been demonstrated by BitConnect, even though it still remains at a surprisingly high 3$ ;-)
Conclusion
Just stop saying prices of cryptos will go down to zero. Some will crash, but as we haven't ever seen anything like cryptos in the history of humans, it's hard for us to predict what's gonna happen with them.
Please comment how you feel about such statements.