Goldman Sachs, has cautioned that if bitcoin becomes more widely used, it will become more vulnerable to rate rises by the Federal Reserve. “As bitcoin has gained widespread acceptance over the last two years, its connection with macro property has increased,” Goldman analysts said.
“As bitcoin has gained public acceptance over the previous two years, its connection with macro assets has increased,” Goldman’s Zach Pandl and Isabella Rosenberg said on Thursday. They said that rising bond rates had caused havoc for “frontier” technology companies in recent weeks. It is done with the tech-heavy Nasdaq 100 index down more than 13% year to date.
Since November, Bitcoin has fallen more than 45% to $36,419 as markets anticipate a rate rise by the Federal Reserve this year. It puts an end to the easy-money period. According to traders, the Fed is expected to raise interest rates five times this year, as the central bank strives to combat the highest inflation in 39 years. Nonetheless, Goldman Sachs analysts believe the Fed will raise rates at every meeting this year for a total of seven increases.
As per Coinmarketcap the whole cryptocurrency market has shrunk from $3 trillion in November 2021 to roughly $1.65 trillion as of Friday. Earlier this month Goldman Sachs projected that bitcoin might hit $100,000 as the cryptocurrency continues to consume into gold’s market share. Meanwhile, UBS, Switzerland’s biggest bank, has predicted a crypto winter in the wake of Fed rate rises and regulatory changes.
The Federal Open Market Committee (FOMC) has yet to announce a timetable for a minimum wage hike. In the following weeks, the FOMC is likely to reach a judgment on the problem. According to Goldman Sachs, the metaverse might have $8 trillion potential.
According to statistics from Bitcoin.com Markets, bitcoin is now trading at $37,502. The cryptocurrency gained 6.6% during the last seven days but dropped 20.5% in the previous 30 days.