Goldman Sachs Suddenly Issued A Crypto Price Warning After Huge Bitcoin Crash

Goldman Sachs Suddenly Issued A Crypto Price Warning After Huge Bitcoin Crash Goldman Sachs Suddenly Issued A Surprise Crypto Price Warning After Huge Bitcoin, Ethereum, BNB, Solana, Cardano And XRP Crash

Bitcoin and cryptocurrency prices have somewhat stabilized this week after a steep sell-off that wiped over $1 trillion from the combined crypto market, with ethereum, BNB, solana, cardano and XRP tanking and sparking fears of a new crypto winter.

The bitcoin price dropped from a peak of almost $70,000 per bitcoin late last year to around $30,000 this month before rebounding slightly—even as some bullish investors bet the bitcoin price will eventually hit staggering highs.

Now, Wall Street giant Goldman Sachs has warned increased crypto adoption may not translate into higher prices and could even damage the narrative that bitcoin, ethereum and other coins diversify a portfolio.

"Mainstream adoption can be a double-edged sword," Goldman Sachs strategists wrote this week in a note first reported by Bloomberg. "While it can raise valuations, it will also likely raise correlations with other financial market variables, reducing the diversification benefit of holding the asset class."

Bitcoin and cryptocurrency adoption has soared over the last year, rising along with the price of most major cryptocurrencies, including ethereum, BNB, solana, cardano and XRP—with some recording eye-watering triple-digit percentage increases.

Wall Street legends, financial giants, high-profile companies and even one country have bought bitcoin, with the expectation the bitcoin price will continue to climb.

Meanwhile, the use of crypto technology to recreate traditional financial services, known as decentralized finance (DeFi), and collectible non-fungible tokens (NFTs) that are both largely built on ethereum's blockchain have soared in popularity as investors pour cash into them.