RE: FUD Monster (Bloomberg & CNBC)
The underlying technology blockchain is not cryptocurrency. Blockchain is a method of organization and tracking. Lets say if you want to keep track of all medical records, the technology blockchain can do it. It dosen't have to have a currency to make a blockchain. By stating that blockchain can improve financial ledgers is only stating that they would be interested in changing the way that they keep track of their ledgers. It doesn't mean that they support cryptocurrencies in any way. Most cryptocurrencies use blockchain technology. Cryptocurrency and Blockchain are however not the same thing.
Goldman Sachs telling people that cryptocurrency is bad is like Apple CEO telling people that Samsung products are bad. A better analogy would be like Walmart CEO telling people that buying merchandise with Amazon is just a fad and Amazon will eventually go out of business.
To put into perspective the desperation of Goldman Sachs:
- Goldman Sachs market cap = $96 Billion
- Bitcoin market cap = $138 Billion
- Cryptocurrency market cap = $387 Billion
It should be noted that Goldman Sachs does have some stake in crypto - They were the majority stakeholder in Circle back in 2015.
The fact that Goldman Sachs is criticizing crypto is definitely in their business interests, there's no question there. It's a market that they don't have a strong foothold in, while several other major institutions are doing much better. This however does not make their criticism any less valid. Look at the facts in the article, rather than writing it off because of the author.
It's extremely troubling that all of the coins plummet everytime Bitcoin drops in value. This is either an indication of a lack of knowledge on the part of investors, a lack of differentiating features among the products on the market, or a systemic problem with the trading market itself.
So... when the stock market corrected a few days ago and most of the stocks went down loosing 4 trillion worth globally, with that kind of thinking you must believe that investors in the stock market also have a lack of knowledge....
If PetroChina were to lose 50% of its value, the stock market would hurt. There would be cascading effects across the markets and those effects would be fairly drastic. However it would not be realistic to assume that General Electric would also lose 50% of its value because of PetroChina's crash.
If Bitcoin were to lose 50% of its value tomorrow, we could reasonably expect every other cryptocurrency to also drop by an average of 50% (Except for Tether). We would expect this drop in the small altcoins as well as more major altcoins like Cardano and Ethereum, even if the reason for Bitcoin's crash had nothing to do with the other coins that are affected.
The reasons for that are debatable. I'm not saying that everyone has a lack of knowledge, but personally I see enough differentiation between altcoins that a movement in BTC would not cause me to sell my ETH or vice-versa. Maybe that just leaves me as a bag holder ;)