Critical warning for crypto money market

The report, prepared by Goldman Sachs investment management unit, stated that the rapid increase in the price of Bitcoin has caused the virtual currency to surpass the real value of the market value and be traded on the so-called "balloon" level.

The report also noted that the rapid increase in Bitcoin prices left behind the "internet balloon" seen in the USA in 1997-2001 and the "balloon craze" in the Netherlands in 1634-1637.

It is emphasized that Bitcoin is the opposite and that the transactions of this virtual currency usually take 10 days for the users, as the concept of digital currency should provide convenience and transparency to the users.

The report also pointed out that the price difference between the Bitcoin prices of internet companies that spoil and translate the virtual money in the US is as high as 31 percent, while the transaction costs of Bitcoin are also high.

Value protection is not expected

Noting that it is not expected to protect the current values ​​of the crypto money in the long term, the report said that if Bitcoin collapses it will not be affected by the global economy or financial markets. The report also includes information that the market value of virtual money is 0.8 percent of the global economy.

The value of Bitcoin dropped by 50 percent in a month after climbing to $ 19 thousand 900 on December 17, 2017, then down to $ 10 thousand on January 16.

In the period known as the "internet balloon" or "dot-com balloon" in the United States, the Nasdaq Technology Index's score rose five-fold in 1995-2000, in 2001 the shares of technology companies fell sharply and nearly half of internet companies in the country were bankrupt.

During the "tulip craze" in Holland, the prices of tulip bulbs started to increase in 1634, and in early 1637, the price of a tulip bulb rose to 5 times higher than the price of an average dwelling in Holland. In February 1637, the prices of tulip bulbs fell sharply, causing producers and investors with futures contracts to suffer a great deal of damage.