Goldman Sachs’ executives are calling plans to ditch their cryptocurrency trading desk “fake news.” After several reports that the project was no longer coming to fruition over what sources cited as “regulatory uncertainty,” top players of the Wall Street giant claim there is no timeline regarding when the project will be fully developed, but plans are still in the works.
Bigger and Better Things
Several months ago, Goldman Sachs gave cryptocurrency a legit boost by announcing that it would create the first ever bitcoin-based trading desk. The move was alleged to give bitcoin the attention it deserved and bring institutional players far and near.
However, the past 48 hours have been marred with reports that the company was abandoning its plans due to the speculative atmosphere surrounding cryptocurrency. Since then, bitcoin has tanked by roughly $900 from its recent $7,300 high, and many were feeling the gut punch taking effect.
Quit Lying to the People
But now, it appears those stories weren’t true; that Goldman Sachs hasn’t rebuked its plans to build the trading desk. It just doesn’t have a set deadline. Martin Chavez – the company’s chief financial officer – explains:
“When we talked about exploring digital assets, it was going to be exploration that would be evolving over time. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principals in physical bitcoin, and as they got into it, they realized that is part of the evolution, but it’s not here yet. From the perspective of custody, we don’t yet see an institutional-grade custodial solution for bitcoin. We’re interested in having that exist, but it’s a long road.”
The Problem with Stories Like These
Though the original news may have been fake or misleading, the damage has been done. Bitcoin has already tanked and showed continued sensitivity towards outside influence and rumors, and the father of cryptocurrency will now have to work to retake its previous position on the financial ladder if it ever wants to reconnect with investors.
There is certainly a danger to fake news in the sense that it can greatly affect the subject in question, particularly bitcoin. Cryptocurrencies have shown themselves to be extremely volatile; they are constantly under the wing of present news stories, which have repeatedly shown they have the power to make cryptocurrency prices swing up or down, and even if a story isn’t real, it can still have a powerful effect on where a digital asset stands, as we now see with the Goldman Sachs report.
Crypto Is Popular – Just Give It Time
Chavez comments that while regulatory uncertainty does remain a concern, it’s not putting a dent on the company’s plans anytime soon. Over time, Chavez is certain that this uncertainty will dissipate; that appropriate legislation will arrive as the public has shown a strong desire for crypto.
In addition, he comments that Goldman Sachs is now looking for potential “over-the-counter” derivatives for bitcoin. He says:
“They’re settled in U.S. dollars and the reference price is the bitcoin-U.S. dollar price established by a set of exchanges.”
Patience Is a Virtue
Most crypto-based ventures such as Goldman’s trading desk are sure to take a long time as cryptocurrency itself is still a birthing medium. New information must be accounted for daily, and the regulation required to legitimize the industry and give rise to all the new projects that could propel it to super-stardom is not going to arrive overnight.
No timeline on the trading desk isn’t necessarily a bad thing; it’s simply realistic. Putting a stamp on when the desk will be complete is near impossible as we don’t know what information we’ll have in the coming weeks or months and leaving an open window as Goldman is doing is probably the best way to ensure the project comes to life when it’s supposed to.