Bitcoin Sheds 12% on News Goldman Sachs May Scrap Crypto Trading Desk

Sean Reid
September 8, 2018

Last April it was also reported that Goldman Sachs hired an expert in crypto trading, Justin Schmidt, to explore the benefits of a Goldman Sachs crypto trading platform, which the financial institution is now postponing on the grounds of lack of cryptocurrency regulations clarity.

"The expectation of adoption by Wall Street has been a major theme for the cryptocurrency market for the a year ago, so any kind of updates on that can certainly move the prices", said Mati Greenspan, senior market analyst at currency trader eToro, by phone from Russian Federation. In May, the NYTimes reported Goldman Sachs was waiting for regulatory approval while figuring out how to deal with holding cryptocurrencies in a safe way. It also said Goldman was for now focusing on projects such as a custody product for cryptocurrencies-something that Chavez discussed Thursday, noting that a safe custody solution was a prerequisite for further cryptocurrency-related services. This was one of the main factors leading Goldman Sachs to the creation of a crypto trading desk.

Plans were in the works to get the desk ready by the end of June 2018.

However, regulators across the world have been intensifying their scrutiny of initial coin offerings (ICOs) and cryptocurrency exchanges. The company also made the first hire for its cryptocurrency markets unit.

However, due to regulatory concerns, the company chose to back off from its original plans. The news has investors nervous that the United States financial giant might know something about Bitcoin and cryptocurrencies that the market has not learned yet.

That news saw bitcoin hold 4% lower at around $7,000 per coin, before falling again late on Wednesday evening. The SEC had already decided against the Winklevoss Bitcoin ETF proposal and things are not looking good for the next ETF waiting approval.

Goldman has not confirmed the report, although the bank issued an official statement. This means that the firm is trying to protect itself rather than turning its back on crypto.

But as for getting into the trading of actual crypto assets itself, Goldman Sachs may still have a way to go, as its recent backpedaling demonstrates.

The statistics coming from these reports signal that although the markets are sitting near their year-to-date lows, and sentiment from investors is overwhelmingly negative, the crypto markets are still in their infancy.

Goldman Sachs clearly remains interested in cryptocurrency.

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