Goldman Sachs is reportedly putting plans to open a trading desk for cryptocurrencies on hold, according to Business Insider. The negative news could have triggered the panic selling that was characterized by the rapid drop in prices. The move comes as bitcoin dropped over 5% in about 90 minutes.
Most of the altcoins in the market cap range suffer from average losses with an interval of 9-12% before the press time.
On Sept. 6, the crypto market lost nearly $40 billion from its valuation in under 24 hours, exhibiting one of the steepest decreases in the previous three years. According to some media sources, the investment bank has been working on the actual set-up of the trading desk even in June 2018.
Goldman Sach has explained that they are now focused more on other digital-coin services, such as a custody product. Executives are said to have concluded that many steps still need to be taken, a lot of them outside the bank's control, before a regulated bank would be allowed to trade cryptocurrencies. The fork currency, which has been opened on Binance, has gained almost 200% and is now trading at $2.98, moving it into the top 25 cryptocurrencies, with a total market cap of just over $450,000. So far, Goldman has apparently not been able to do that.
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A week earlier, a second attempt of the infamous Winklevoss' twins was shot down, leading to the creation of the Virtual Commodity Association (VCA) - an influential group led by the Winklevi with a goal of having Bitcoin et al openly traded on Wall Street as soon as possible.
"In response to client interest in various digital products, we are exploring how best to serve them in the space", the spokesman said. "At this point, we have not reached a conclusion on the scope of our digital asset offering", Goldman Sachs said in a statement. While other cryptocurrencies abound, Bitcoin remains the most important and popular - especially for millennials. Total crypto market capitalization is around $222 billion at press time, down from yesterday's high of $240 billion.
In addition to this, 87% of the respondents who are familiar with Bitcoin have not ventured into mining or trade of this giant cryptocurrency.
The Wednesday Bitcoin price crash following the pessimism expressed by Goldman Sachs is an excellent example of how vulnerable the Bitcoin market is, and why it is necessary for investors to proceed with extra caution.