Global investment firm Goldman Sachs presented a gloomy price outlook for leading cryptocurrency Bitcoin in its mid-year economic report. Bitcoin’s price currently stands at $7,447.07–up 12.40% the past month, but has fallen 9.09% in the last seven days.
If Goldman Sachs’ premonitions hold true, then the decline the past week could be a harbinger of things to come.
“Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected,” said chief investment officer Sharmin Mossavar-Rahamani. “We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”
Related: Bitcoin Needs to Hold This Technical Area or Trouble Could Arrive
After reaching a high of $20,000 last December, the price of Bitcoin has fallen unceremoniously to as low as $5,800. It did rally past $8,000 in recent weeks due to news regarding interest from investment giant BlackRock, as well as the U.S. Securities and Exchange Commission (SEC) deciding whether to approve a Bitcoin exchange-traded fund (ETF)–a request filed through the Chicago Board of Exchange (CBOE) by investment firm VanEck and blockchain platform SolidX.
Regardless of what the cryptocurrency does in terms of price, Goldman Sachs does not believe a steep decline would rattle the capital markets to a large extent given its size relative to the world’s gross domestic product.