- Sharmin stated that cryptocurrencies “in their current format” are “in a bubble.”
- And only 1% of global GDP will be affected if the crypto bubble burst.
Sharmin Mossavar-Rahmani, the chief investment officer (CIO) of the Investment Strategy Group at Goldman Sachs, declared on February 27 in an interview with Business Insider that cryptocurrencies are presently in a bubble, which, when this bubble bursts, only 1% of global GDP would be affected.
Sharmin, who has been in the business of guiding investment strategy for customers with over $10 million in assets, said that topics on cryptocurrencies are “the hot topics” among her customers and colleagues. She stated that Goldman Sachs recognizes the many opportunities that can be derived from Blockchain technology by many fintech firms, however, cryptocurrencies “in their current format” are “in a bubble.”
During the interview, Sharmin made reference to data from a public report by Goldman Sachs’ Investment Strategy Group, comparing price trends of Bitcoin and Ether with equity bubbles of the past like the TOPIX in 1990, and Nasdaq in 2000.
Sharmin claims that TOPIX and Nasdaq look “like a flat line” in comparison to cryptocurrencies, and even in comparison to the well-known Tulip bubble of the early 1600s, the price of Bitcoin is far too high. Sharmin added that the price of Ether “is even more astronomical,” as the bubble on the graph far surpasses that of Bitcoin.
Considering the impact of crypto bubble burst, Sharmin suggested that the burst wouldn’t lead to a global financial crisis, because unlike previous bubbles, cryptocurrencies make up only a smaller part of the global economy. He stated:
“Cryptocurrencies are a much smaller part of the global economy, whether you compare it to US GDP or global GDP, it’s less than 1% of global GDP.”
She also added that as there have been significant investments in building infrastructures, exchanges, and hedge funds in the cryptocurrency world, when the crypto bubble eventually bursts, some people “will get hurt… But it’s a very, very small part of global GDP.”
The CEO of Goldman Sachs, Lloyd Blankfein, on January 31 denied the report that Goldman Sachs would be launching a cryptocurrency trading desk, although the New York bank has owned a stake in a cryptocurrency trading desk Circle since 2015.
Join Our Telegram Channel
Cryptona.co is a popular news resource devoted to cryptocurrencies, blockchain and new technologies. If you have breaking news, suggestions, story tip or interesting ideas to send to our journalists? Please write to us at [email protected]