According to Goldman Sachs Managing Director, rising inflation could push the price of Ethereum to $8,000 before the end of 2021.
Multinational investment bank Goldman Sachs believes the native Ethereum (ETH) token could nearly double its USD value during the remaining two months of 2021.
The managing director of the financial institution – Bernhard Rzymelka – confirmed the forecast with the correlation between cryptocurrencies and global inflation rates. To be precise, they are in direct proportion, and rising inflation is leading to an all-time high of digital assets.
Can Ethereum Skyrocket to $8,000?
In a recent note, top executives provided detailed predictions of why ETH could rise to $8,000 by the end of the current year.
According to him, cryptocurrencies have been trading in line with the inflation break-even point since 2019. He asserts that soaring inflation is fueling the record rise in prices of digital assets, and more specifically, ether.
Rzymelka outlines a chart with the Bloomberg Galaxy Crypto Index on the log axis versus the next 2 year USD 2-year inflation swap. The chart tracks “market inflation very closely, likely reflecting the pro-cyclical nature of being a “network-based” asset, he added.
A few days ago, the second-largest cryptocurrency hit an all-time high of $4,460. Despite having gained more than 5x since the start of the year, Goldman Sachs records show more gains in the next two months.
Analysts note that ether could hit $8,000 if the correlation with inflationary FWD continues.
Rzymelka added that the entire digital asset landscape has matured in recent years and could now benefit the most from rising inflation.
It “lines up fairly well with Ethereum charts, suggesting a late-stage rally with long term market tops ahead.”
It is worth mentioning that PayPal Co-Founder Peter Thiel also believes that the soaring price of digital assets is indicative of financial problems.
Alluding to bitcoin, the billionaire said that BTC above $60,000 means the global economy is in a state of crisis, while central banks are in “a moment of complete bankruptcy.”
Goldman Sachs Likes Ethereum
The giant financial institution seems to have a high opinion of the blockchain project Vitalik Buterin and its original cryptocurrency. Back in July, analysts from the bank predicted that ETH would 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.