Strongin calls the current period of cryptocurrencies an experiment and compared it to the internet bubble of the late 1990s. He said that very few companies that existed then went on to become even more valuable. Both Google and Amazon did but in a “completely different form,” he added.
“So, are any of today’s cryptocurrencies going to be an Amazon or a Google, or will they end up like many of the now-defunct search engines? Just because we are in a speculative bubble does not mean current prices can’t increase for a handful of survivors,” Strongin said.
“At the same time, it probably does mean that most, if not all, will never see their recent peaks again.”
Goldman’s head of investment research said that the underlying technology behind cryptocurrencies called blockchain, “clearly has a role” in improving the ledgers underlying financial transactions.
Goldman has previously poured cold water on cryptocurrencies as an investment. In October, the investment bank released a note saying that bitcoin is not the new gold.
Other commentators have also cautioned on cryptocurrencies. Noted economist Nouriel Roubini, also known as “Dr Doom,” said Tuesday that he thinks the price of bitcoin would crash to zero. And legendary investor Warren Buffett told CNBC in a recent interview that cryptocurrencies will “come to a bad ending.”
Cryptocurrencies rebounded on Wednesday though many were still off their all-time highs. Still, experts told CNBC that the cryptocurrency market as a whole could hit $1 trillion this year.
