Investment bank Goldman Sachs is ditching its plans to open a cryptocurrency trading desk, reports detail. It was only early last month when rumors circulated that the legacy financial institution was even doubling down on their digital asset fever. That appears not to be the case anymore, and markets are not taking the news well.
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Goldman Sachs Drops Crypto Trading Desk Plans
Crypto markets are down sharply, with bitcoin core (BTC) falling by as much as 5.3 percent on news Wall Street is out of love with the idea of digital assets, at least for now. “In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering,” Goldman Sachs spokesperson explained.
Etoro market analyst Mati Greenspan noted, “The expectation of adoption by Wall Street has been a major theme for the cryptocurrency market for the last year, so any kind of updates on that can certainly move the prices. Even if it’s not true, it should be enough to cause a minor selloff like this in cryptocurrencies.”
Goldman Sachs has an interesting relationship with crypto in that it was among the first to actively clear bitcoin futures from Chicago’s CME and Cboe late last year. The legacy financial institution is reportedly dropping all plans to open a trading desk for cryptocurrencies, however. Having an investment bank with its pull and power was seen by observers as previously handing over its seal of approval, a very valuable imprimatur on cryptocurrency.
Not Completely Done with Crypto, but Backing Away for Now
Reporting from Business Insider claims Goldman has backed out of those plans. Citing too much ambiguity in the regulatory space surrounding crypto, executives pulled the plug on the desk, urging more needs to be done in terms of regulation before a regulated bank such as itself can confidently dabble.
Speculation about Goldman and crypto goes all the way to last year, when most considered its entrance to be a matter of time. However, a lot can happen in a year, and a lot has. From skyrocketing valuations and market caps, cryptocurrencies have come way back down to earth. Combine prices plummeting with bitcoin ETF denial after denial from the US Securities and Exchange Commission (SEC), and a bleak picture began to form for executives.
On the news, bitcoin belched up more than 5 percent in minutes. Ethereum, Ripple, and Litecoin did basically the same, with ether giving up double digits.
Business Insider concluded, “As part of that decision, Goldman has moved plans to open a desk for trading cryptocurrencies further down a list of priorities for how it can participate in cryptocurrency markets, the people said. It may revive these plans later, they added. But for now, Goldman is focusing on other projects such as a custody product for crypto, which would mean that the bank holds cryptocurrency and, potentially, keeps track of price changes on behalf of large fund clients. Many market observers have said that for large institutional firms to get comfortable trading bitcoin, there need to be reputable custody offerings to safeguard holdings.”
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