In a recent analysis, Goldman Sachs claimed that as more individuals utilize bitcoin, the Federal Reserve’s rate increases become more vulnerable.
Bitcoin, according to Goldman Sachs analysts, has become more tightly linked to macro assets in the last two years due to a surge in users.
Goldman Sachs’s Warning
Goldman Sachs, a worldwide investment bank, published a research paper on Thursday in which it stated that bitcoin is more vulnerable to an increase in interest rates by the Federal Reserve.
Pandl and Rosenberg, who work together as a co-head of foreign exchange strategy at HSBC, say that as more people use bitcoin, it becomes more vulnerable to changes in Federal Reserve policy. The association between bitcoin and other assets has been stronger in recent years as bitcoin has gained more general acceptance. This is what they had to say:
The researchers concluded that Bitcoin and other digital assets were likely affected by the same forces. As a result of rising bond yields, the Nasdaq 100 index has fallen over 13% so far this year. These assets will be exposed to market volatility and macroeconomic pressures, such as when the central bank raises interest rates.
Bitcoin Earlier
Previously, it was anticipated that the Federal Reserve would hike interest rates five times this year. The Federal Reserve is expected to raise interest rates at each of its meetings this year, according to this forecast.
The FOMC did not specify when the rate rise would occur in a post-meeting statement last week, although it is likely to occur before the February meeting.
Goldman’s analysts went on to argue that further blockchain development, particularly metaverse applications, might help digital assets appreciate in value over time.
Bitcoin Afterward
In a recent report, Goldman Sachs estimated that the metaverse might be worth up to $8 trillion dollars. Morgan Stanley, a rival investment bank, believed that the metaverse was approximately the same size as the physical universe.
Goldman Sachs forecast earlier this month that bitcoin would surpass $100,000 due to its increased market share over gold. A rise in Federal Reserve interest rates and new laws, according to UBS, will cause a crypto winter.
One bitcoin is now worth $37,502, according to a report from Bitcoin.com Markets. The value of the dollar climbed by 6.6 percent during the course of the previous seven days. This is a decline of 20.5 percent in the previous 30 days. However, it has risen by 9.8 percent so far this year, according to the latest figures.
According to a survey conducted by Crypto.com, 1 billion people will hold bitcoin by the end of 2018.
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