In a recent report Goldman Sachs highlights the price movements of Ethereum and Bitcoin. It also shows that stocks increase when they use blockchain for their promotion. One example is: The Crypto Company, with a spike of more than 17,000% prior to when the US Securities and Exchange Commission (SEC) has suspended the trading of its stock.
The researchers say the mania is surprising. This is due to the fact that the Bitcoin, has not even fulfilled the role it has set for itself.
The report reads:
“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, the safety of ownership, and so on. But bitcoin does not provide any of these key advantages.”!
Bitcoin Network Issues
Following on this, the report further stated that a single Bitcoin transaction nowadays can take up to 10 days to process. Additionally, the value of the same single Bitcoin can vary depending on the exchange for the transaction. There was a greater than $4,000 discrepancy in the price of Bitcoin between different exchanges at the same time.
The report adds that this means that one user could be possibly paying 31% more for BTC on one exchange than on another.
The Goldman Sachs Bitcoin Bubble warning report also stresses another issue of this cryptomarket. The analysts talk about the high transaction costs. In spite of the inflation of Bitcoin and altcoins, there is no risk that they will be affecting the US or any other global economy.
The cryptocurrencies are a small fraction of the US and world GDP – 3.2% and 0.8%, respectively. However, the dot-com bubble has appeared much more significant for the US and the entire world at that time – 101% and 31% of GDP, respectively.
Source: https://atozforex.com
