[In a turn of events, Goldman Sachs has not abandoned their plans to develop a trading desk. Originally reported by business insider, this development is now being dubbed ‘Fake News’.
While attending TechCrunch Disrupt, Goldman Sachs CFO, Marty Chavez spoke on the subject. He stated, “I was in New York yesterday and I was co-chairing our risk committee, and I saw the news article…it wasn’t like we announced anything or that anything had changed for us… I never thought I’d hear myself actually use this term, but I’d really have to describe that as fake news.”
With the damage already done, and the overall market being hit hard from the original news, we have yet to see a rebound in price. On a positive note, this entire saga has brought more insight into the plans of Goldman Sachs.]
The market is seeing a decline today after days of steady growth. While the market as a whole had grown to roughly $240 billion in previous days, roughly $17 billion was swiftly wiped out this morning.
Why the drop?
Many are associating this drop with Goldman and Sachs. In late 2017 the financial firm had announced their intentions on developing a cryptocurrency trading desk. The industry as a whole viewed this as a positive development, and eagerly awaited the arrival of such a service.
Unfortunately, the venerated investment firm announced today that they have now put these plans on hold. While they intend to revisit the idea at some point in the future, their focus has now changed. This is obviously being viewed in a negative light by most, as it will potentially further delay the arrival of the long-awaited ‘institutional money’ into the market.
Not all is bad
Despite this obvious set back by a company that has overall had a positive approach towards cryptocurrencies, there was a silver lining in their announcement. While announcing their distancing from a trading desk, they confirmed that they are focusing their efforts on a custody solution for digital assets.
As of now this is also a much needed service. It is one that may be needed even more-so than a trading desk at this point in time. To date, there are very few reputable custody services being offered. Before institutional money buys into the market, they need to be able to rest easy, knowing that their assets are being held by a trustworthy custodian. A custodian that has a positive reputation, is insurance backed, and fits their every needs.
Rapidly growing Coinbase, earlier this year, announced the launch of their very own custody solution. Based out of Seattle, Coinbase has launched multiple products this year looking to foster growth within the industry. By creating a blueprint of the successful structuring of services, we are now seeing announcements such as the one by Goldman and Sachs as they follow suit.
Bakkt to the Future
Now that the industry has been given clarity on the intentions of Goldman and Sachs, we can now refocus our sights on the future.
Despite this setback, we have a platform confirmed to be launching in the coming months. Announced earlier this year was the Bakkt platform, a subsidiary of the Intercontinental Exchange (Mother Company of NASDAQ).
With the services this platform intends to offer, a trading desk offered by Goldman and Sachs – although nice- is not a NEEDED offering. Bakkt intends to offer the same services and more.
Instead of viewing this as a negative announcement, it should be viewed in a positive light. We now have a clearer view of market progress. The market still has impending ETF’s, Bakkt, and a now confirmed custody solution to be offered by a respected investment bank. The future is brighter than ever.