Goldman Sachs Effectively Pumping the Brakes on a Crypto Trading Desk
One of the biggest cryptocurrency-related headlines this year came months ago when Goldman Sachs was revealed as working on a bitcoin trading desk. Now, the powerhouse bank has reportedly kicked the desk down the queue, with the firm still working on the service but focusing more time and resources on other endeavors like a crypto custodial product. It’s not abandonment, but the de facto slowdown has raised some brows.
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Goldman Reportedly Downgrades Crypto Desk’s Prioritization
Wall Street heavyweight Goldman Sachs is, in effect, postponing its bitcoin trading desk by pivoting the bulk of its attention to related services in the crypto ecosystem, namely a digital assets custody solution.
The reporting comes after the public learned in May 2018 that the multinational investment bank was angling toward making the leap into crypto trading.
With a generally bearish cryptoeconomy in 2018, perhaps a digital assets trading desk was deemed by Goldman’s leadership as less sexy toward the end of the year than it was at the beginning.
Likewise, offering a custody service would be a simpler project logistically and legally for Goldman Sachs, the firm not being under financial pressure to rush directly into cryptocurrencies.
Moreover, NYT‘s Nathaniel Popper has reported that Goldman is “still moving ahead with trading crypto futures and forwards.”
Re the new report that Goldman is ditching its Bitcoin trading plans: sources tell me that they are continuing to put off trading actual Bitcoin, but they are still moving ahead with trading crypto futures and forwards for clients, as we reported in May https://t.co/MK2nUDHOZg https://t.co/3NSwIW3tVr
— Nathaniel Popper (@nathanielpopper) September 5, 2018
‘We Don’t Need No Stinkin’ Goldman Sachs!’
The cryptoverse is filled with financial rebels, and for the more irreverent of this lot, Goldman Sachs, or Vampire Squid as the firm has been called in some circles since 2009, generally typifies everything that Bitcoin is meant to stand against.
As such, Goldman’s de facto postponement of their bitcoin trading desk has already been panned by some in the space as a bout of irrelevant willy-nillyness.
No wait, here it is! I knew ZH would come through with maximum bullsh_t. Seriously, #Bitcoin was created BECAUSE OF the damage caused by Goldman Sachs. It didn't need it to get to $20k, and DEFINITELY doesn't need it to get there again!https://t.co/FJOKUNeNvb
— Andy Hoffman (#HODLBTC) (@Andy_Hoffman_CG) September 5, 2018
On the flip side, others, like DTC Capital’s Spencer Noon, have suggested thinking the purported refocusing is “bearish” is missing the forest for the trees.
So Goldman Sachs is prioritizing custody over trading and you guys think it’s bearish? Acquiring crypto was never the problem.
— Spencer Noon 🕛 (@spencernoon) September 5, 2018
Goldman News Hits Already Sagging Market, But Macro Seems in Play Too
Bitcoin seemed to be pushing into a bullish uptrend in recent days before the cryptoeconomy started losing steam acutely once again. The Goldman Sachs’ news comes as most big-cap cryptocurrencies are sinking near 2018 lows.
At press time, bitcoin itself was down five percent on the day in currently hovering just over $7,000 USD. Ether has fared doubly worse in the same span, sinking down 10 percent to $258 in the past 24 hours.
Speaking of ether’s price action, things could get uglier before they get better for the second largest cryptocurrency by market cap, classical chartist Peter Brandt has suggested. Whether that dynamic would coincide with the rest of the cryptoeconomy tanking in kind remains to be seen.
— Peter Brandt (@PeterLBrandt) September 5, 2018
Important to keep in mind is that today’s downtrend in crypto has been matched in many traditional markets, indicating that macro dynamics are likely also contributing well beyond any daily chop and any bearish sentiment over the Goldman Sachs’ news.
Markets edge lower. Dow loses 12 points. S&P 500 and Nasdaq dip 0.2%. Tesla sinks 4% on negative Goldman Sachs report. Nike falls 3% after announcing ad campaign featuring Colin Kaepernick. https://t.co/0ruYhO7HPr
— CNNMoney (@CNNMoney) September 4, 2018
What’s your take? Is this GS delay good, bad, or irrelevant news for the crypto space? Let us know in the comments below.
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