Goldman Sachs Drops Plan to Open Bitcoin Trading Desk, for Now

  • Goldman Sachs has reportedly dropped its plan of opening a bitcoin trading desk, for now.
  • Unnamed sources cited regulatory uncertainty for the Wall Street giant's decision.

Goldman Sachs has reportedly dropped its plan of opening a bitcoin trading desk, at least in the near future, moving it down the list of products it’s set to offer in the cryptocurrency markets. The move comes as bitcoin dropped over 5% in about 90 minutes.

According to a report published by Business Insider, the Wall Street giant has decided to downgrade its plans over the cryptocurrency space’s regulatory landscape. The news outlet’s report, citing sources familiar with the manner, noted Goldman Sachs’ bitcoin trading desk plans may be later on revived.

The company will, for now, focus on developing other projects like its crypto custody service, which could see the bank hold cryptocurrency and even track price changes on behalf of large institutional clients.

Goldman Sachs itself had been taking baby steps to enter the cryptocurrency space and launch its bitcoin trading desk. Back in October of 2017, reports suggested it was studying cryptocurrencies through with a group of employees, and in December it was claimed a bitcoin trading desk would be ready in June.

In April of this year, as CryptoGlobe reported, the Wall Street firm hired crypto trader Justin Schmidt as its head of digital asset markets. In May, the NYTimes reported Goldman Sachs was waiting for regulatory approval while figuring out how to deal with holding cryptocurrencies in a safe way.

At the time, Business Insider notes, Schmidt was considering trading bitcoin and not just derivatives, if Goldman Sachs managed to get regulatory approval. The outlet’s unnamed sources claim it now ran into a “regulatory roadblock,” without adding more details.

Its report suggests the bank was looking for regulatory developments that haven’t yet materialized. These would likely help protect the bank from the risks associated with trading and holding cryptocurrencies.

Various analysts believe Goldman Sachs’ move is behind bitcoin’s $400 drop that saw it dip below the $7,000 mark. Speaking to Bloomberg Mati Greenspan, a senior market analyst at eToro, stated:

The expectation of adoption by Wall Street has been a major theme for the cryptocurrency market for 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.

Mati Greenspan

Goldman Sachs is notably still moving forward with its crypto custody service. This means it’ll be competing with the likes of Coinbase and BitGo. Other major Wall Street firms, including JP Morgan and Fidelity, are said to exploring similar products.

eToro Launches Crypto Portfolio That Gauges Market Sentiment

  • eToro is partnering with TheTie to launch a crypto-asset portfolio based upon market sentiment.
  • The algorithm mines social media data to select thirteen crypto-assets for investment each month.

Global crypto investment platform eToro has announced the launch of a new product for crypto investors that will provide access to a sentiment-based portfolio. 

Crypto Market Sentiment Investing

According to the press release shared with CryptoGlobe, eToro is launching TheTIE-LongOnly crypto portfolio for investors, which is the result of a collaboration with the algorithm-driven firm TheTie. The new portfolio uses “highly advanced natural language processing tools” to determine market sentiment towards various crypto-assets, by mining data from social networks and generating an investment algorithm. 

TheTIE is leveraging the day-to-day sway in the crypto markets, stating

The value of digital assets is driven by supply and demand, and movement is determined by the wisdom of the crowd.

Guy Hirsch, US managing director of eToro said the portfolio’s release will give retail investors access to more powerful tools, 

In traditional markets, retail investors have historically lagged behind the ‘smart money’ when it comes to the data and tools available to them. This puts individual investors at a major disadvantage. In the spirit of crypto and decentralized technology, we believe that offering institutional-grade tools to every investor will level the playing field and democratize investing.

The analytics firm reports scanning more than 850 million tweets per day to generate their algorithm for the portfolio, which will be allocated to a subset of thirteen crypto-assets. The minimum investment in the product is $2,000.

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