Goldman Sachs rejection like Crypto-nite as bitcoin slides
Goldman Sachs pulled its planned trading desk for cryptocurrencies on Wednesday according to Business Insider as sentiment weighed on bitcoin along with other cryptocurrencies like ethereum and ripple were sent plummeting.
At the time of publishing bitcoin fell -4.45% to $7,041.69. Business Insider attributes Goldman Sachs’ decision to an uncertain regulatory environment by people familiar with the matter.
Its been long anticipated that the investment bank would join the cryptocurrency arena as investor interest rose. A traditional bank like Goldman Sachs entering the arena was seen as plugging a credibility gap when it came to crypto funds. However, it was always up for debate what form Goldman’s eventual participation would take as the bank has regularly said on the back of client interest it was “exploring digital assets” and how it could meet needs.
Rumours not only swirled about a bitcoin trading desk but also of a custody fund offering. Business Insider affirms the latter is where Goldman Sachs will focus tracking price changes on behalf of larger fund clients.
Goldman Sachs made a number of moves prior that led to expectations that a trading desk would have been ready this summer including pulling together a team to study the industry and this April, hiring Justin Schmidt as its head of digital assets market.
The regulatory roadblock may deter the bank from its trading desk route but moving into custody services could, as Goldman insiders point out in Bloomberg, “lead to other ventures, including prime-brokerage services”.