Goldman Sachs is reportedly putting a hold on its plans to open a Bitcoin trading desk, instead focusing on a custody crypto product for institutional investors.
Goldman Sachs Changes Course
According to people familiar with the matter, the investment bank has switched course due to an unclear regulatory framework for the crypto industry, reports Business Insider.
As a result, its priority for opening a Bitcoin trading desk has slipped down the list. However, it may revise this at a later date, the report added.
In April, it was reported that Goldman Sachs was moving closer to launching its Bitcoin trading desk. While it wasn’t confirmed, the realization of it would have made it the first U.S. bank to do so. Not only that, but it would have given the nascent industry a much-needed credibility boost. This, in turn, would have attracted more investors to enter the space.
Now, however, failing to find a way to trade Bitcoin, the investment bank is putting its plans on hold. Instead, it’s turning its attention to a custody product for crypto for large institutional clients.
News of this was first reported last month. At the time, it was noted that the bank would hold securities on behalf of the funds, reducing risk for clients. A spokesman for Goldman Sachs said:
In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.
Notably, its move to offer a custody product for crypto puts it in direct competition with other firms offering similar solutions. These include the likes of crypto exchange Coinbase’s custody service or Wall Street bank JPMorgan, who have indicated they are thinking about a crypto custodial tool.
Market Prices Drop
Following the news regarding Goldman Sachs, industry prices have fallen today. However, whether it’s related is not known.
At the time of writing, Bitcoin has seen a 4.63 percent drop to just over $7,000 in 24 hours, according to CoinMarketCap. Ethereum has fallen to $258, representing a 10.78 percent decline, whereas NEM has dropped by 12.10 percent. The combined market is currently valued at more than $222 billion.
Of course, while market prices are down at present, a potential approval of a Bitcoin ETF next year could boost prices up again.
What do you think of Goldman Sachs’ plans to put a Bitcoin trading desk on hold? Let us know in the comments below.
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