Most cryptocurrencies are likely to fail with their value falling to zero, Goldman Sachs said in a note, comparing the current market to the "internet bubble of the late 1990s."
Steve Strongin, head of Goldman Sachs global investment research, said in a note dated Monday, that cryptocurrencies don't have "intrinsic value" adding that it's "unlikely" whether any of today's digital currencies are likely to survive in the long run.
"People seem to be trading cryptocurrencies as though they're all going to survive, or at least maintain their value. The high correlation between the different cryptocurrencies worries me. Contrary to what one would expect in a rational market, new currencies don't seem to reduce the value of old currencies; they all seem to move as a single asset class," Strongin said.
"But if you believe this is a 'few-winners take-most' situation, then the potential for retirement depreciation should be taken into account. And because of the lack of intrinsic value, the currencies that don't survive will most likely trade to zero."
The Goldman research note comes after a violent sell-off in the cryptocurrency market over the past few days, which at its lowest point on Tuesday, saw over $550 billion of value wiped off the market. Bitcoin even dipped below $6,000 for the first time since November.