Bitcoin and altcoins at risk after Goldman Sachs, Blackrock, Citi warning
Bitcoin and other altcoins could be at risk as the biggest players on Wall Street warn about the state of the market.
Bitcoin (BTC) price held steady on February 8 and reached an intraday high of $79,300 as investors bought the dip. Other altcoins were also up for the day, with Ethereum (ETH), Ripple (XRP), and Binance Coin (BNB) rising by over 3%. The other top-performing coins were JasmyCoin (JASMY), Core (CORE), and Zcash (ZEC), which rose by over 18%.
The stock market was also upbeat, with futures tied to the Dow Jones, S&P 500, and Nasdaq 100 indices climbing nearly 2%. The rebound came after Donald Trump showed some flexibility on tariffs by agreeing to meetings with countries like Japan and Vietnam.
Wall Street banks warn on recession and US stocks
Still, Wall Street analysts continue to warn about the Liberation Day tariffs, which some see as a black swan event that will cause more damage to the economy.
On Monday, Goldman Sachs raised its recession odds to 45%. In a separate note on Tuesday, the bank downgraded US stocks from “overweight” to “neutral.” Another team of Goldman analysts warned that the US equity market may be entering a prolonged bear cycle.
Meanwhile, Blackrock’s Larry Fink warned that most executives he’s spoken with are increasingly worried about a recession. That carries weight, given BlackRock’s status as the largest asset manager globally with $11 trillion in assets.
Other Wall Street institutions have echoed these concerns. Citi recently downgraded US equities and advised investors to pivot toward Asia-based markets.
These forecasts matter for crypto markets because of the close correlation between Bitcoin, altcoins like ETH and XRP, and broader risk assets. Historically, these asset classes have tended to move in the same direction.
Bitcoin and altcoins have a silver lining
On the positive side, Bitcoin and altcoins could benefit if the US enters a recession and equities tumble. In that scenario, the Federal Reserve would likely be forced to step in.
Pressure is already mounting on the Fed from both the market and the Trump administration to act before the situation worsens. Trump has cited weakness in the bond market and falling oil prices as reasons for a preemptive rate cut.
Further, the derivatives market now prices a 44% chance of a Fed cut in its meeting in May, up from 10 a week ago. Also, Goldman Sachs has predicted that the bank will cut rates three times in the year’s second half.
A dovish Federal Reserve would likely be a catalyst for risky assets like Bitcoin, altcoins, and the stock market. A good example is what happened during the COVID-19 pandemic when the Fed slashed rates to zero and implemented quantitative easing policies.
