Goldman Sachs: Bitcoin On Path to Maturity and Stability; ECB President Calls It Speculative
After a massive rally last week, Bitcoin (BTC) has finally entered in the correction zone. The BTC price has corrected more than 15% from Sunday’s high above $41,500 and is currently trading at 34,217 with a market cap of $636 billion.
Jeff Currie, Goldman Sachs’ head of commodities research, believes that Bitcoin (BTC) has started showing signs of maturity. Currie’s latest comments came during his recent interview with CNBC.
Speaking to the media-house, the Goldman Sachs executive said: “I think the market is beginning to become more mature. I think in any nascent market you get that volatility and those risks that are associated with it. The key to creating some type of stability in the market is to see an increase in the participation of institutional investors and right now they’re small”.
Currie however adds that more institutional money should still flow into Bitcoin for it to stabilize. As we know, Bitcoin (BTC) is relatively a volatile asset class. With more than $600 billion of institutional money invested in Bitcoin this is just 1% of the total institutional money flow in the market which is still small.
However, one of the biggest questions that remain is how to value Bitcoin (BTC). This is unlike stocks with standard metrics wherein we can figure out whether it is overprice or undervalued. “That can give you some long-run equilibrium,” Currie said. But he added that the level of volatility and uncertainty in the market “makes it very difficult to forecast it.”
On the other hand, ECB President Christine Lagarde has went out calling Bitcoin as a speculative asset which plays with investors’ psychology. The President’s comments came during her recent talks while talking about the role of sovereign digital currencies issued by national banks.
Lagarde’s comments came when someone asked about the evolving status of Bitcoin as a lucrative investment option. Responding to this, she said: “I think she answered her own question as to why there will be people who would still prefer Bitcoin over central bank digital currencies. Is it mostly/purely speculative? Sure, one can say that it is. But it is an interesting experiment on human/investor psychology”.
Besides, the ECB President has also called for clear regulations in the crypto space. She added: “And there has to be regulations and this has to be applied and agreed upon,” at a global level, said Lagarde. “If there is an escape, that escape will be used. So I think […] global cooperation and multilateral action is absolutely needed, whether it is initiated by the G-7, moved into the G-20, and then enlarged […] And the FATF is clearly an organization that has expanded in that respect.”