The international investment bank Goldman Sachs believed that Ethereum (ETH) could reach to $8.000 and could almost double in value in the last two months of 2021. Yes, that’s exactly what Goldman analysts said. However, when we come to the end of 2021, we see that this prediction of Goldman did not hold.
Ethereum price closed the year just over $4,000, let alone $8,000. How about remembering Goldman Sachs’ failed prediction in the first days of the new year? The crypto world is such an interesting world that it can turn even the largest financial institutions into the wrong corner.
Can Ethereum go up to $8,000?
The managing director of the financial institution – Bernhard Rzymelka – justified this forecast by the correlation between cryptocurrencies and global inflation rates. More specifically, they are in direct proportion, and rising inflation is leading to record spikes in digital assets.
In a recent memo , the CEO made his forecast that ETH could rise to $ 8,000 by the end of this year. According to him, it is soaring inflation that is driving the price of digital assets, namely ether.
Rzymelka presented a chart with the Bloomberg Galaxy Crypto Index on a logical axis against a 2-year inflation forward swap in USD. This graphic traces “inflation markets particularly closely, possibly reflecting the pro-cyclical nature as a web-driven asset.”
The second largest cryptocurrency has just hit a record high of $ 4,528. Despite more than 5x growth since the beginning of the year, Goldman Sachs is suggesting even greater profits in the next two months. The analyst noted that if the correlation with FWD inflation remained constant, the ether could reach up to $ 8,000,
Rzymelka added that the entire digital asset landscape has matured over the past few years and could now benefit most from rising inflation. This “fits in quite well with the ethereum chart, suggesting a late stage in the rally with a long-term market peak ahead.”
It’s worth mentioning that PayPal co-founder Peter Thiel also believes that soaring digital asset prices are pointing to economic problems. According to him, BTC above USD 60,000 means that the global economy is in crisis, and banks are in “a moment of complete bankruptcy.”
Goldman Sachs likes Ethereum
The financial institution seems to have a positive opinion of the Vitalik Buterin project and its native cryptocurrency. Back in July, the bank’s analysts predicted that ETH would eventually become a better value store than BTC. According to them, the network behind ETH also has the greatest real utility potential.
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