A Goldman Sachs economist has joined the list of those concerned with the impact that cryptocurrencies, such as bitcoin, could have on the U.S. economy.
In the report "10 Questions for 2018," issued late Friday (Dec. 29), Jan Hatzius warned that financial imbalances within the credit market and cryptocurrencies could cast a shadow on the U.S. economy for 2018.
“Asset valuations in some areas – especially credit – have risen to high levels by historical standards ... While we have not seen the type of large credit expansions that would be most worrisome for Fed officials concerned about financial imbalances, there are now some signs of speculative behavior in financial markets, e.g. the cryptocurrency boom," Hatzius wrote in the report.
According to Fortune, Hatzius also gave predictions about Federal Reserve rate increases, 2.6 percent growth for U.S. gross-domestic products, a 3.5 percent decline in the jobless rate and the yield curve not inverting.
Hatzius is not the only one keeping a close eye on bitcoin and other cryptocurrencies. Also this week, India’s finance minister has joined the list of people decrying the trading of bitcoin and other associated cryptocurrencies, claiming that it is, at base, the same as buying into a Ponzi scheme.
Meanwhile, a Massachusetts regulator issued a warning about digital currencies. “It doesn’t pass the smell test,” William Galvin, secretary of the Commonwealth of Massachusetts, said Wednesday on CNBC. “There is no product here. This is entirely speculation. That’s already been proven by the high gyrations of the value. It’s also subject to manipulation, because no one can explain it [and] no one can control it.”
In a research report covered by USA Today, Nick Colas, co-founder of DataTrek Research, wrote that bitcoin could trade in the range of $6,500 to $22,000 next year. That would create a lot of volatility for a cryptocurrency that has already surged more than 1,600 percent this year alone.