Posted on

Goldman Sachs CFO Calls Trading Desk Rumors “Fake News”

Bitcoin (BTC), Cryptocurrency–Despite reports surrounding a potential cryptocurrency trading desk by Wall Street goliath Goldman Sachs–and its subsequent closure–the company has since come out to debunk any such reports.

First reported by CNBC on September 6, Goldman Sachs Chief Financial Officer (CFO) Martin Chavez has explained that reports related to the company abandoning its intended cryptocurrency trading desk have been “fake news,” and described the entire scenario as a premature understanding. Speaking at the TechCrunch Disrupt Conference in San Francisco, the CFO of Goldman Sachs put the situation rather bluntly,

“I never thought I would hear myself use this term but I really have to describe that news as fake news.”

While Bloomberg had originally reported at the end of last year that Goldman Sachs was working on the implementation of a cryptocurrency trading desk to be launched in 2018, a story out of Business Insider earlier this week claimed that the project had been shuttered. The Business Insider report quoted unnamed sources as the basis of the information, giving evidence that the Wall Street firm had decided to do away with the previously hyped up trading desk. In addition, the story cited the unclear regulatory environment of cryptocurrency–a feature that many have been alluding to as a barrier to institutional investors–was the primary reason for Goldman shelving the project, at least in the interim.

Chavez has since come forth to say that the excitement over a Goldman Sachs crypto trading desk got ahead of the facts, with the industry not yet being at the point of maturation necessary for such a venture,
“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 principal and physical Bitcoin, and as they got into it they realized part of the evolution but its not here yet.”

Chavez also went on to say that the bank has no intention to proceed with physical Bitcoin trading at this point in time, claiming that a more reliable custody solution was needed before they would consider the option. However, the company does still provide liquidity for BTC future contracts through CBOE and CME, a feature that some have seen as a prelude for the industry finally obtaining approval by the U.S. Securities & Exchange Commission for Bitcoin Exchange-Traded Funds. Expanding upon the idea of Goldman Sachs venturing into Bitcoin directly, Chavez called the idea “tremendously interesting,” but also went on to state that it would be challenging to implement in the current market form,

“Physical bitcoin is something tremendously interesting, and tremendously challenging. From the perspective of custody, we don’t yet see an institutional-grade custodial solution for Bitcoin, we’re interested in having that exist and it’s a long road.”

The post Goldman Sachs CFO Calls Trading Desk Rumors “Fake News” appeared first on Ethereum World News.

Posted on

Goldman Sachs Drops Plans To Establish Crypto Trading Desk

Goldman Steps Away From Trading Desk Plans, Still Intends To Create A Custody Service

Institutional investment has long been hailed as the future of this industry, as optimists claim that the interest of Wall Street firms will drive the growth of this early-stage market. But in an unexpected setback, as reported by Business Insider, Goldman Sachs, indisputably one of the most respected firms in the business world today, has just dropped its plans to establish a Bitcoin (BTC) trading desk.

As reported by Ethereum World News in October of last year, the Wall Street giant hinted that it had plans to offer Bitcoin (BTC) trading, but now it seems that this plan has been all but quashed.

According to those familiar with the matter, this will be a temporary move, as the firm will be delaying these plans for “the foreseeable future.” When queried about why this U-turn took place, the insiders noted that the regulatory uncertainty regarding this asset class is putting off Goldman’s top brass.

This decision will also see Goldman move plans to open a trading desk lower on the ladder of crypto-related products that the financial giant intends to offer. But as aforementioned, this setback is likely to be only temporary, as those familiar with the matter noted that this decision may be revised in the near future if the regulatory climate improves.

One of the insiders also noted that the firm’s executives concluded that “many steps still need to be taken, most of them outside the firm’s control,” before a firm like Goldman can make a legitimate foray into cryptocurrency trading.

A Goldman Sachs representative commented on the matter, reiterating a statement that was made in August:

“In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering.”

However, it isn’t all bad news, as Goldman is reportedly still making moves to establish a crypto custody service for its bigwig clients. Many cite a lack of proper custody solutions as a primary reason why institutions are hesitant to enter this market, so a fully-fledged custody service from a household name could prove to be a long-term asset for the crypto market as a whole.

Additionally, the financial company still intends to make markets for its clients to trade BTC futures, as Ethereum World News reported in May. But as fittingly alluded to by Brian Kelly, CNBC commentator and CEO of BKCM, many naysayers may gloss over the fact that custody and futures are still available and focus on the “negative” trading desk news instead.

CNBC claims that this news was the catalyst that pushed the cryptocurrency market down by over 7% within a few hours, but due to the unpredictable and volatile nature of this nascent market, some believe that this was just an untimely coincidence.

At the time of writing, Bitcoin has fallen to $6,900 and is down 6% on the day.

Photo by Wes Hicks on Unsplash

loading…