Is Bitcoin a (Bursting) Bubble?

Published on20 FEB 2018
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The dramatic rise (and fall) in cryptocurrency prices over the past several months has sparked a debate about whether Bitcoin and its peers are overvalued. The key to determining fair value, says Allison Nathan, senior strategist for Goldman Sachs Research, is identifying the economic problems cryptocurrencies solve—an exercise that leaves Goldman Sachs economists cautious. “In most areas of the world where we have well-functioning fiat currencies and reliable banking systems, there just doesn’t seem to be a need for digital currencies,” Nathan says, though she notes that Goldman Sachs Research remains optimistic that blockchain, cryptocurrencies’ underlying distributed ledger technology, can have a transformative impact across a wide range of industries.


We are optimistic that blockchain, the distributed technology that underpins digital currencies, could have a meaningful and important impact across industries. But as the debate over crypto pricing itself continues, we would take a fairly cautious view.

- Allison Nathan