Reportedly, plans to open a desk for trading cryptocurrencies have been dropped by Goldman Sachs. The move sent the prices of popular coins including bitcoin and ethereum plummeting on Wednesday.
Sources who are familiar with the matter informed Business Insider that Goldman Sachs was worried about continuing with its plans while future global regulatory frameworks for cryptocurrencies continue to be unclear.
According to reports, over the past few weeks, internal teams who are working on the proposition came to the conclusion that there are still too many obstacles for a regulated bank to trade cryptocurrencies, in order for the company to move forward with its plans. Instead, it will concentrate on other digital asset services such as a custody product.
A spokesperson Goldman Sachs refused to confirm the reports, however, he said that “at this point, we have not reached a conclusion on the scope of our digital asset offering.”
The said news sent the prices of the major cryptocurrencies sinking, as bitcoin dropped by more than six percent to record a five-day low at $6,908 (£5,352) on Bitstamp exchange which is based in Luxembourg. Other popular coins such as Ethereum, Ripple, and Litecoin plunged by nine perccent, 7.7 percent, and 7.1 percent respectively.
According to Bloomberg, US stocks that have exposure to cryptocurrencies also fell amidst the news.
This year, Bitcoin has lost nearly half its value so far, as the trading volumes on cryptocurrency exchanges have dropped by almost 80 percent. according to Coinmarketcap, its overall market value is now approximately $223bn, which is down from the more than $800bn at the start of the year.
Instead, cryptocurrencies had been trading at a high in the past weeks, powered by the support from high-profile firms including Goldman Sachs itself.
Earlier this month, sources told Bloomberg that the company was said to be considering a plan to offer custody for outside cryptocurrency funds. No timeline was revealed on when the bank would be launching its services.
Earlier this year, Goldman Sachs hired its first head of digital asset markets, however, it has yet to manifest any concrete steps towards a crypto offering.