And, so, that was fast.
In an about face that seems sharp enough to cause whiplash, Goldman Sachs seems poised to abandon its plans to establish a trading desk focused on cryptocurrencies.
Reuters, in turn citing Business Insider, noted that the shift comes in the midst of an uncertain regulatory landscape. Business Insider said the news came from unnamed “people familiar with the matter.”
Goldman’s reported backing off of the trading desk idea comes after the company had been mulling clearing bitcoin futures for at least some clients, the newswire stated. As reported at this time last month, a number of financial publications had reported that Goldman’s had been planning to hold cryptos on behalf of funds, where the bank would have acted as custodian.
Reuters quoted spokesperson Michael DuVally, who stated at the time that “at this point, we have not reached a conclusion on the scope of our digital asset offering.”
That indecisiveness seems presaged by CEO Lloyd Blankfein, who tweeted in October of last year that he and/or the firm were “still thinking about bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money replaced gold.”
On the heels of the news Wednesday morning that Goldman’s was backing off its plans, bitcoin traded down more than 5 percent to about $6,985.
That initial enthusiasm surrounding Goldman’s foray into cryptos seems long ago and far away, perhaps – traced back to a period when bitcoin was trading at thousands of dollars apiece at the end of last year.
The Wall Street embrace of cryptocurrencies has been a varied one. JPMorgan Chase CEO Jamie Dimon has said that bitcoin is a “fraud” that is worse than the tulip “mania” that has become shorthand for speculative bubbles across the past several centuries. Conversely, Morgan Stanley’s CEO James Gorman has said that the emergence of cryptos represents “more than just a fad.”
Recounted Reuters, regulators far flung by country have been cracking down on cryptocurrencies, especially through bans on initial coin offerings (ICOs) and on trading via exchanges, as has been seen in China. A bit closer to home, the U.S. Securities and Exchange Commission (SEC) said last year that coins launched in the ICO should be considered to be securities, which also would place them under the purview of federal securities (and tax) laws.