The freefall in the value of Bitcoin and other cryptocurrencies has shaved off $500bn of market value, but this may be only the beginning of a brutal end.
Financial analysts such as Nouriel Roubini has called Bitcoin “the mother of all bubbles.” In an interview with Bloomberg on Wednesday, Roubini called the fundamental value of Bitcoin “zero” and the whole cryptocurrency industry a scum.
That is not only the view of Roubini.
A Goldman Sachs report dated February 5 projects that most current cryptocurrencies will collapse in their current form, noting “lack of intrinsic value.” The Goldman Sachs analyst, Steven Strongin, projects a winner takes all market, rather than the end of blockchain-based currencies. However, “most, if not all, will never see their recent peaks again,” Strongin argues.
Strongin disagrees with Roubini, viewing the underlying cryptocurrency technology as essentially sound – rather than merely a scum – although it does not offer the speed required for financial transactions.