“Over the last two years, as Bitcoin has gained in adoption, its correlation with macro-assets has increased,” the bank noted. Noting that rising bond yields have weighed on tech stocks in recent weeks, the bank stated: “Bitcoin and other digital assets have likely suffered from the same forces. These assets will not be immune to macroeconomic forces, including central bank monetary tightening.”
Recall that since last week’s Fed meeting, markets now expect the Fed to raise interest rates five times this year. Goldman Sachs thinks the Fed could raise interest rates at every meeting this year.
Finally, on a positive note, Goldman Sachs also explained that Bitcoin will benefit in the medium and long term from its own bullish factors: “Over time, the continued development of blockchain technology, including applications in the metaverse, could provide a secular tailwind to valuations of certain digital assets.”
Also, remember that Goldman Sachs estimated in early January that Bitcoin could reach $100,000 in five years if Bitcoin’s market share as a store of value reaches 50% (the other store of value asset is gold), given that this market share is currently 20%.
Source: Ambito
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