Wall street banking juggernaut, Goldman Sachs recently announced that it would be shelving plans to set up a cryptocurrency trading desk, indefinitely. The news apparently sent the crypto market sliding downwards, with bitcoin shedding as much as 5.3% of it’s value.
The reluctance of incumbent institutions to acknowledge digital assets, coupled with regulatory uncertainty have raised an important important question: does the cryptocurrency market really need institutional money?
Though several financial institutions globally, are setting up to dip their feet in the murky waters of digital assets, the entry of big banks runs counter to Bitcoin creator, Satoshi Nakamoto’s vision of an anti-establishment, economic system. Alistair Milne, the chief information officer for the Atlanta Digital Currency Fund certainly thinks so – tweeting on September 5th:
We didn't need Silk Road
We didn't need Mt Gox
We didn't China
… and we don't need a Bitcoin ETF
— Alistair Milne (@alistairmilne) August 23, 2018
Adding in a subsequent Tweet:
Don't need Goldman Sachs either
It stands to reason that cryptocurrencies would benefit a great deal from monetary reforms, and adoption from Wall Street, as money would flow into the market and solidify digital assets as the next economic wave. This sentiment is shared by most crypto pundits and is reflected in the price drops that follow the SEC’s rejection of crypto based ET applications as well other other negative news coming out of Wall Street.
Milne, on the other hand, is of the opinion that cryptocurrency is digital money and the market can grow more organically if companies that issue cryptocurrencies focus on developing quality products.
However, without regulatory oversight and institutional acknowledgment, the cryptocurrency market may remain a wild west for a long time and in turn, run the risk of government crack downs. Which doesn’t bode well for public trust.
On the one hand it is reasonable to believe that the crypto-economy does not need Goldman Sachs nor any other institutional powerhouse to grow, as it can grow from gradual adoption by the global populous. Many within and from outside the crypto space however, believe that regulations and institutional involvement will help stabilize the market and reduce risk, which in turn, will pave the way for mass adoption.