The crypto market is struggling to keep above the waters after Goldman Sachs decided to withdrawal its support for plans to launch a crypto trading platform. The move, announced on Wednesday, has sent market prices for cryptocurrencies, including the popular ones like Ethereum and Bitcoin, on a downward spiral.
Apparently, the bank has had some misgivings about the regulatory situation in regard to cryptocurrencies. The fact that there are still some grey areas in legal issues surrounding regulatory policies for the new digital assets has been quite a put off for the banking institution, and hence the decision to shelve its earlier plans to build a trading platform for cryptocurrencies. Goldman Sachs has opted to deal only in custodial products.
The prospects of such a large banking institution making an entry into the crypto world had brought hope and confidence in many traders and investors, and that worked really well to keep the market a bit stable for the past few weeks.
Prior to the negative development triggered by the news on Wednesday, Bitcoin was on the way to breaching the $7,500 barrier after swinging between $6,000 and $7,000 for weeks. Suddenly, the bulls are fast retreating and the bears are out.
Within minutes of the announcement, the pioneer crypto saw a 6% drop down to $6,900 range, and things haven’t looked up since. Ripple lost 7.7%, Litecoin went down by 7.1%, and Ethereum sunk by 9%. Bloomberg reports that stocks attached to cryptos also took a hit as a result of the flash-crash.
Generally, it hasn’t been a good year for Bitcoin. Over the months since January 2018, the cryptocurrency has lost about 80% of its trading volume – down to a sad $223 billion from an impressive $800 billion recorded at the beginning of the year.
Things started getting better for the market when large institutions like Goldman Sachs started showing signs of embracing the digital assets, and that somehow breathed some life into the market and kept it on a high over the last few weeks. The market situation got even better when Goldman Sachs was reported to have been toying with the idea of its own crypto trading platform.
In fact, the bank put together a digital asset team, but that doesn’t seem to have borne fruits – at least not yet. Apparently, the team working on the project came to the conclusion that the current regulatory environment isn’t conducive for a banking institution to try its hand in cryptos.
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