Will mainstream adoption take crypto’s price to the moon? It’s not a guarantee according to GoldmanSachs. (Reporting via WilliamSuberg)
) and cryptocurrency adoption may not necessarily make its price higher in dollar terms, Goldman Sachs argues.Thursday, the international banking giant claimed that mainstream acceptance of crypto assets would increase their correlation to other mainstream asset classes.In a view contrary to that of many Bitcoin proponents, Goldmanby the prospect of crypto as a tool for the enrichment of the mass populace.
“While it can raise valuations, it will also likely raise correlations with other financial market variables, reducing the diversification benefit of holding the asset class,” the note reads. Its authors, Zach Pandl and Isabella Rosenberg, additionally described mainstream adoption as a “double-edged sword.”
Put another way, should Bitcoin or crypto become more correlated with extant assets, the scope for asymmetric profit would be reduced. The comments come as crypto markets indeed exhibit a higher correlation with equities, in particular, this month, with projections for 2022
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