In a recent letter documenting their research into bitcoin, Goldman Sachs has argued that bitcoin is a massive bubble in danger of bursting.

According to recent reports, published on the 23rd of January 2017, the banking firm compared bitcoin to the \"tulip mania\" of 17th century Holland, in which high numbers of people rushed to buy tulips, pushing their price up, eventually leading to a crash. The flower has since waned in popularity, with many other varieties outperforming the bloom when it comes to demand and sales.

The firm discussed the sharp increase in the value of bitcoin and other cryptocurrencies and the rise in stock prices for businesses that utilise blockchain. The authors of the letter pointed out that this jump in market value price was a surprise as it is not the fast and inexpensive payment system that it initially presented itself to be.

The writer\'s state that bitcoin or any digital currency that makes use of blockchain technology could potentially provide a number of benefits, such as a reduction in cases of crime and corruption, as well as offering a faster and more inexpensive payment system. However, they point out that bitcoin has not fulfilled any of these potentialities to date.

Instead, bitcoin is inhibited by large fees and incredibly slow transaction processing times. While the authors suspect that an eventual crash will take place, they do not believe that such a crash will go on to damage the global economy in any notable way.