Bitcoin falls off a cliff again as cryptocurrency slump deepens

Eileen GuzmanSep 08, 2018

Following news of a delay, Goldman Sachs CFO Martin Chavez is now saying that the firm never had a timeline for it in the first place.

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.

Cryptocurrency markets seemed to respond negatively to the news.

The next key level to watch for Bitcoin is US$5,000, according to Innes, who said a drop below that threshold may cause losses to accelerate. The rest of the top five cryptocurrencies by market cap toppled by more than 12 percent.

Eight months ago, just after the price of bitcoin hit its all-time high of more than $19,000, Bloomberg reported that Goldman Sachs was working to set up a cryptocurrency trading desk.

Plans were in the works to get the desk ready by the end of June 2018.

"Executives have concluded that many steps still need to be taken, majority outside its control, before a regulated bank would be allowed to trade cryptocurrencies", they write. It suddenly graced the $8,300 mark and stayed in the $8,000 range for about two weeks before succumbing to bearish trends and falling back down again.

Its report suggests the bank was looking for regulatory developments that haven't yet materialized. Instead, the bank will reportedly focus on a custody product for digital currencies created to serve large, institutional clients.

"Their name carries weight across the globe", said Ryan Rabaglia, head trader at digital asset brokerage OSL in Hong Kong, referring to Goldman Sachs.

For the time being, Goldman will direct its efforts toward custody services, where it securely holds crypto assets on behalf of its large institutional clients to ensure those assets are kept safe and secure.

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.

"A lot of retail investors' hopes for a bigger institutional presence were really being driven by Goldman Sachs". The news has investors nervous that the United States financial giant might know something about Bitcoin and cryptocurrencies that the market has not learned yet.

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