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08.04.2021 03:50 PM
Goldman Sachs awaits the "evolution of the cryptocurrency market"

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Goldman Sachs CEO David Solomon said that the cryptocurrency market will continue to develop due to the ever-growing demand for "digital assets". Also, he believes that a "major evolution" will take place in the coming years. Solomon did not explain what he exactly means by these words, however, he noted that the bank is constantly working to improve services for clients related to the cryptocurrency sector.

At the same time, the CEO of the cryptocurrency platform Chatex, Michael Ross-Johnson, said that the probability of bitcoin correction to $40,000 per coin is now very high. According to him, the bitcoin rate may rise a little more in the coming days due to the influx of new small investors after the US authorities began distributing $1,400 to each American as part of a new economic stimulus program, but this growth will be short-lived and not strong. Ross-Johnson calls the exit from transactions of institutional investors the reason for the fall since at this time the stock markets are showing good dynamics, and the yield of government bonds is growing. Investors who bought bitcoin during the crisis wanted to escape inflation and the depreciation of the dollar or euro. Now that the economy has begun to recover, especially in America, they may start to return to more traditional, quieter, and less risky investment vehicles like stocks and bonds.

But economics advisor to the insurance company Allianz, Mohamed El-Erian, believes that if bitcoin crashes, the entire global financial system will suffer from this. In his opinion, in 2021, many private and institutional investors invested in bitcoin, thus, a fall in its value will cause a collapse in quotes, and will also affect not only the wallets of private and small investors but also large companies, funds, crypto exchanges, investment banks and so on. Bitcoin has penetrated too deeply into the existing financial system and will not be able to get out of it easily and simply, without consequences. "In the financial market, you need to be as careful as driving a car. After all, even a small accident can lead to a major congestion on the roads. The same goes for bitcoin," says El-Erian.

El-Erian also identified three types of investors who invest in bitcoin. First, some people sincerely believe that bitcoin will become a global, single, decentralized currency that will be used everywhere along with ordinary money. Second, these are speculators who want to make a profit on the difference in rates. Third, these are investors who are trying to secure their capital from inflation or a fall in the exchange rate of the national currency. The last two categories will be ready to dump bitcoin as soon as they feel that its upside potential is limited or completely depleted.

Paolo Greco,
Analytical expert of InstaForex
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