Bitcoin, other cryptocurrencies plunge after report on Goldman plans

Bitcoin, other cryptocurrencies plunge after report on Goldman plans

Bitcoin, other cryptocurrencies plunge after report on Goldman plans

Business Insider reported Wednesday that Goldman Sachs sees the regulatory environment as ambiguous and therefore too risky to delve into cryptocurrencies. It was only early last month when rumors circulated that the legacy financial institution was also doubling down on their digital asset fever.

Will the crypto market recover any time soon?

Michael DuValley, a Goldman spokesperson told Reuters 'At this point, we have not reached a conclusion on the scope of our digital asset offering'.

"The expectation of adoption by Wall Street has been a major theme for the cryptocurrency market for the previous year, so any kind of updates on that can certainly move the prices", said Mati Greenspan, senior market analyst at currency trader eToro, by phone from Russian Federation.

Interestingly enough, men seem to be more aware of digital coins - only 13 percent of men said they have not heard of any kind of cryptocurrency compared to the 27 percent of women providing the same answer.

Bitcoin, the largest cryptocurrency, tumbled as much as 9.8 per cent and was trading at US$6,480, down 6.8 per cent, as of 10 NY, according to Bloomberg composite pricing.

In January of this year, the bank denied press reports claiming that they were working to open a cryptocurrency exchange platform.

Reporting from Business Insider claims Goldman has backed out of those plans.

"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". "There's lots of great fundamental news about the development of cryptocurrencies right now, but that's going to take time to filter through and impact on price".

Goldman Sachs considered the strong resistance from the SEC on Bitcoin exchange-traded funds (ETFs) proposals as a hindrance to the healthy implementation of its plans. From skyrocketing valuations and market caps, cryptocurrencies have come way back down to earth.

The Wednesday Bitcoin price crash following the pessimism expressed by Goldman Sachs is an excellent example of how vulnerable the Bitcoin market is, and why it is necessary for investors to proceed with extra caution. In a madcap morning, Bitcoin fell by a total of 6%, while Ethereum, Litecoin and Ripple all racked up double figures - ETH lost 12% in a single morning. In October of 2017, the Wall Street behemoth had said it was looking into the possibility of launching a new trading operation focused on bitcoin and other digital currencies.

The theory behind a "squeeze" is the possibility of the Ethereum seeing a rapid price increase at a time when short trading it becomes overcrowded.

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