Many believed that 2018 signaled the beginning of the end for the crypto market. From near $20K price of Bitcoin in mid-December and trading at around $5,700 in June 2018, many thought that Bitcoin was actually out.
However, there are still those who are optimistic regarding the entire crypto market. Regulatory changes are viewed by some as the crypto market maturing. And also, you have the likes of Tom Lee who believe that regulatory clarity is a necessity in order to involve institutional investors.
By having Wall Street investors into play, capital flowing into the market could easily give the necessary boost that it needs. In fact, ICE working with Starbucks and Microsoft is seen by many as a great development for the niche.
Is There Regulatory Clarity?
Does it mean that there really is regulatory clarity in the crypto market at this point? Is the market ready for institutional investors? The US Securities and Exchange Commission already considered Bitcoin and Ethereum both as commodities. This meant that both cryptocurrencies don’t have to meet regulations meant for investment vehicles such as stocks. However, you also have Ripple’s XRP that is still in a grey area as it deals with lawsuits claiming that it’s a security.
In addition to this, there have been a number of Bitcoin ETF applications denied by the US Securities and Exchange Commission. Though some of these Bitcoin ETF applications are to be reviewed by the agency, there is still no certainty that there will be a Bitcoin ETF soon.
Goldman Sachs Drops Crypto Trading Desk Plan
It has been reported that Goldman Sachs decided to drop its plan of having a Bitcoin trading desk at least for now. Instead, Goldman Sachs is looking to develop other projects such as crypto custody service.
Back in 2017, there were reports that Goldman Sachs has been studying the niche. In December, the bank claims that it is going to have a Bitcoin trading desk ready soon. The Wall Street firm even hired Justin Schmidt as its head of digital assets.
However, there’s news coming from unnamed sources that “regulatory roadblock” is the main reason why Goldman Sachs decided to pull out on its Bitcoin trading desk plan. It seems that the bank is still looking for regulatory clarity before it decides to dip its toes into the crypto market completely.
Drop in Bitcoin’s Price
Following the announcement, the price of Bitcoin slipped. It was thought by some experts that crypto holders are simply panic selling. However, Mati Greenspan who is the senior market analyst at eToro stated that “The expectation of adoption by Wall Street has been a major theme for the cryptocurrency market the last year, so any kind of updates on that can certainly move the prices. Even if it’s not true, it should be enough to cause a minor selloff like this in cryptocurrencies”.
However, the good news is that Goldman Sachs is still going after a crypto custody service. It is competing against Coinbase and BitGo and other Wall Street players such as JP Morgan and Fidelity.