Goldman Sachs speculates that Ethereum (ETH) could double its value by the end of this year.
The bank’s Managing Director, Bernhard Rzymelka, justified the prediction citing the correlation between global inflation and crypto. More specifically, they are in direct proportion. Rising inflation accompanies all-time highs of digital assets.
Can Ethereum Surge to $8,000?
In a recent announcement, Rzymelka provided a detailed forecast of why ETH may increase to $8,000 in the next two months. He says crypto has traded in line with inflation breakevens since 2019. He insists that the skyrocketing inflation fuels an increase in digital asset prices, including Ethereum.
Rzymelka outlined a graph of the Bloomberg Galaxy Crypto Index versus the USD 2-year forward 2-year inflation swap. The chart tracks “inflation markets particularly closely, likely reflecting the pro-cyclical nature as a “network-based” asset.
A couple of days earlier, ETH reached an all-time high of $4,460. Although already up by more than 5x earlier this year, Goldman Sachs’s note suggests Ethereum could see more gains in the following two months. If the correlation with inflation FWDs continues, the analyst observed that Ethereum could top $8,000.
Rzymelka noted that the digital asset space has grown in the last couple of years and could now profit more than ever from the recent rising inflation. This “lines up rather well with the Ethereum chart, suggesting a late-stage rally with longer-term market top ahead.”
PayPal’s Co-Founder, Peter Thiel, also thinks that the increasing prices of digital assets indicate financial problems. Talking about bitcoin, the billionaire claimed that BTC being above $60,000 means the global economy remains in a state of crisis, while central banks are at a “complete bankruptcy moment.”
Goldman Sachs Loves Ethereum
The colossal bank appears to favor Vitalik Buterin’s blockchain project and its native cryptocurrency. In July, experts from the financial institution predicted that ETH would outperform BTC as a store of value.
They also see the blockchain network behind Etehreum with the most significant actual use potential. They say it is the most prominent development platform for smart contract applications.
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