Bitcoin falls off a cliff again as cryptocurrency slump deepens

Andrew Cummings
September 8, 2018

Business Insider cites unnamed sources saying that the crypto trading desk is now "not a priority" for the institution.

The latest round of selling comes after Business Insider reports that Goldman Sachs is halting plans to build a crypto desk in part because of a tough and uncertain regulatory landscape. Instead, the bank will reportedly focus on a custody product for digital currencies created to serve large, institutional clients.

Goldman Sachs giveth, and Goldman Sachs taketh away.

But with regulatory waters still murky, executives have decided more steps need to be taken, a lot of them outside the bank's control, before a regulated institution would be allowed to trade cryptocurrencies, according to Business Insider.

As reported by CNBC, Goldman Sachs Chief Financial Officer Martin Chavez came out and cleared the FUD around report that the bank was ditching plans to launch a cryptocurrency trading desk, calling it a "fake news".

The overall market capitalisation of virtual currencies has lost three-quarters of its value since its January peak, according to Coinmarketcap, slumping from $800bn to around $200bn now.

He added: 'The regulatory environment is going to be key to all of this and the fact that Goldman Sachs remains so concerned is clearly a blow'.

"Their name carries weight across the globe", said Ryan Rabaglia, head trader at digital asset brokerage OSL in Hong Kong, referring to Goldman Sachs. One crypto writer, Tanya Abrosimova, said that the drop could be attributed to attempts to regulate the global crypto market, which may have spooked investors. However, Brian Kelly, founder and CEO of crypto hedge fund BKCM, is more anxious about the long-term impact of Goldman Sachs' about-face. Goldman Sachs has opted to deal only in custodial products. Bitcoin had, however, also reached its highest price in August and traders may have simply been selling off in order to make some cash.

This news top the market by sudden surprise and everyone started dumping coins across the board assuming that this move by Goldman would mean there would be no institutional money flowing into the crypto market.

Following that report, the price of bitcoin fell by around $300 in the space of an hour.

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