Goldman Sachs Expects Ethereum to Hit $8,000 by The End of 2021: Report
The multinational investment bank Goldman Sachs believes Ethereum’s native token (ETH) could nearly double its USD value during the remaining two months of 2021.
The Managing Director of the financial institution – Bernhard Rzymelka – justified the forecast with the correlation between cryptocurrencies and global inflation rates. More precisely, they are in direct proportion, and the rising inflation leads to all-time highs of digital assets.
Can Ethereum Skyrocket to $8,000?
In a recent note, the top executive gave a detailed prediction why ETH could rise to $8,000 by the end of the ongoing year. According to him, cryptocurrencies have traded in line with inflation breakevens since 2019. He asserted that the soaring inflation fuels a record increase of digital asset prices, and more specifically, ether.
Rzymelka outlined a chart with the Bloomberg Galaxy Crypto Index on a log axis versus the USD 2-year forward 2-year inflation swap. The graphic tracks “inflation markets particularly closely, likely reflecting the pro-cyclical nature as a “network-based” asset, he added.
A few days ago, the second-largest cryptocurrency hit an all-time high of $4,460. Despite being up by more than 5x since the start of the year already, Goldman Sachs’ note suggested even more gains in the following two months. The analyst noted that ether could reach a whopping $8,000 if the correlation with inflation FWDs persists.
Rzymelka added that the entire digital asset landscape has matured in the past few years and could now benefit the most from the increasing inflation. This “lines up rather well with the Ethereum chart, suggesting a late-stage rally with longer-term market top ahead.”
It is worth mentioning that PayPal’s Co-Founder Peter Thiel also believes that the soaring prices of digital assets indicate financial issues. Touching upon bitcoin, the billionaire said that BTC above $60,000 means the global economy is in a crisis state, while central banks are at a “complete bankruptcy moment.”
Goldman Sachs Has a Crush on Ethereum
The giant financial institution seems to have a high opinion on Vitalik Buterin’s blockchain project and its native cryptocurrency. Back in July, analysts from the bank predicted that ETH will eventually become a better store of value than BTC.
They also see the blockchain network behind ETH with the highest real use potential adding that it is the most popular development platform for smart contract applications.
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