Goldman Sachs Is Reportedly Backing Off Plans for a Bitcoin Trading Desk

Image courtesy of Ethereum World News archives

Image courtesy of Ethereum World News archives

Hinting at it earlier this summer, Goldman Sachs executives have confirmed that it is postponing the launch of a Bitcoin trading desk due to regulatory uncertainty, according to Business Insider.

Cryptocurrency markets seemed to respond negatively to the news. The move comes as bitcoin dropped over 5% in about 90 minutes. The rest of the top five cryptocurrencies by market cap toppled by more than 12 percent.

Futures contracts have always been aimed at increasing liquidity and decreasing volatility, which was also evident as August recorded the lowest volatility in Bitcoin futures contracts since they started in December (chart below shows monthly volatility for CBOE's XBT).

Originally, the new trading desk was to be operational by the end of June. The crypto trading desk was to become part of Goldman's securities division, where the Wall Street giant trades everything from stocks to bonds to currencies.

The biggest problem for financial institutions that want to buy and sell bitcoin is that the centralized exchanges the asset trades on have a history of being vulnerable to hacks.

Its report suggests the bank was looking for regulatory developments that haven't yet materialized. So far, Goldman has apparently not been able to do that.

A week earlier, a second attempt of the infamous Winklevoss' twins was shot down, leading to the creation of the Virtual Commodity Association (VCA) - an influential group led by the Winklevi with a goal of having Bitcoin et al openly traded on Wall Street as soon as possible.

When questioned about the report that it is abandoning its plans, a Goldman Sachs spokesperson told FOX Business that, "We're sticking with the statement we've been using all year."In response to client interest in various digital products, we are exploring how best to serve them in the space".

The company will, for now, focus on developing other projects like its crypto custody service, which could see the bank hold cryptocurrency and even track price changes on behalf of large institutional clients.

Why is the crypto market crashing again?

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.

Notícias recomendadas

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.