Goldman Sachs is ditching plans to open a desk for trading cryptocurrencies as the regulatory framework for crypto remains unclear, Business Insider reported on Wednesday, citing people familiar with the matter.
The entire cryptocurrency market seems to be in the hands of the bears once again.
Even so, the report stressed that Goldman was not abandoning its nascent cryptocurrency operation.
In recent weeks, executives have come to the conclusion that many steps still need to be taken, a lot of them outside the bank's control, before a regulated bank would be allowed to trade cryptocurrencies, the financial news website reported, citing one of the people.
Bitcoin and other cryptocurrencies suffer a sudden crash
Bitcoin BTC=BTSP was trading down almost 4.8 percent at $7,007 on the Luxembourg-based Bitstamp exchange on Wednesday.
The biggest problem for financial institutions that want to buy and sell bitcoin is that the centralized exchanges the asset trades on have a history of being vulnerable to hacks. The company stated that it was backing away from its alleged cryptocurrency trading desk that it previously claimed would arrive during the summer, and it should come as no surprise that regulatory uncertainty is the reason why.
"In response to client interest in various digital products, we are exploring how best to serve them in the space", Goldman Sachs spokesman Michael DuVally told Barron's.
However last night's fall was created, it is a further blow to any thoughts of a concerted recovery in the crypto markets, at least for now. Also, Goldman Sachs is engaged in developing Bitcoin derivatives to satisfy the clients' needs. With the U.S. Securities and Exchange Commission (SEC) still pushing back on proposals for bitcoin exchange-traded funds, for instance, U.S. governmental authorities have not yet embraced cryptocurrencies to the extent many had expected by this time.
Clearly, the market still respects Goldman Sachs outlook on the crypto market.
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