Goldman Sachs (NYSE:GS) has finally clarified that a cryptocurrency trading desk is not in its plans for the foreseeable future.
Some investors must feel downtrodden about this news. Let’s find out what’s going on.
Cryptocurrency Trading Desk? The Goldman Sachs Rumor Mill
The rumor mill has been churning for some months now; it was believed that Goldman Sachs had been making significant progress toward establishing a direct crypto trading desk.
But what started this game of crypto telephone?
Well, catalysts for the rumor go back to 2017 and began when the bank hired seasoned crypto trader Justin Schmidt. The new hire drew speculation that Goldman Sachs was looking to develop a space in the cryptocurrency field. Whispers began.
Goldman Sachs unintentionally fanned the flames further. A spokesperson announced it was working to meet the demands of their clients who “have expressed an interest in cryptocurrencies.”
Further comments emerged from the mouths of crypto influencers and eventually it was purported that a Goldman Sachs cryptocurrency trading desk was on the horizon.
However, by January 2018, Goldman Sachs disputed the rumor by clarifying that it was simply clearing futures in Bitcoin for some of their futures clients. The bank’s chief executive Lloyd Blankfein detailed this in an interview with CNBC, distancing the bank from any principal Bitcoin business.
And today with a recent report on Business Insider, the rumors are laid to rest.
According to the report, the issue lies with the uncertainty of regulation surrounding cryptos. It remains to be a key factor that is keeping Goldman Sachs from involvement with the market. This is also the reason given by the SEC for denying several applications for a Bitcoin ETF.
But the company is not turning a blind eye completely. It is focusing on a custody product for crypto. A service which aims to provide a comfortable platform for large institutional clients who want to enter the cryptocurrency market.
We are hoping to hear more on this in the weeks coming.
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