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Did ‘Fake News’ Destroy Bitcoin’s Legitimacy in the Market?

Recently, news about Goldman Sachs has been spreading rapidly, that the company is backing away from its plan of launching cryptocurrency trading desk. Though the news was fake, it still dealt a severe blow to the cryptocurrency industry.

Last year Goldman Sachs had announced its plan of establishing a cryptocurrency desk by the end of 2018 but some unknown source had revealed on 5th September that the company is abandoning its plan because of the uncertain regulatory environment in the crypto industry. The Chief Financial Officer (CFO) of Goldman Sach, Martin Chavez has confirmed that the news was fake and there is no change in plans to create the trading desk. Chavez also said that the excitement for the trading desk may have been premature.

According to Chief Financial Officer (CFO) of SFG Alternatives, Larry Shover, the cryptocurrency market is dominated by speculators. These speculators are looking for legitimacy of bitcoins and other cryptocurrencies from established financial institutions such as Goldman Sachs. Cryptocurrency market is so desperate about the legitimacy that a fake news dealt a severe blow to the cryptocurrency industry.

Chavez said that exploration of digital assets will evolve with time. Goldman Sachs is building markets as principal and physical bitcoins. The company is clearing and providing liquidity for Bitcoin linked future contracts from CBOE and CME.

Goldman Sachs is currently working on bitcoin derivatives which are non-deliverable forwards. The reference price will be bitcoin/USD price that will be established by a group of exchanges. These are over the counter derivatives which can be settled in U.S. dollars. To proceed with the physical Bitcoins, there must be reliable custody solutions. Physical bitcoins are very interesting as well as challenging but from the perspective of custody, there is no custodial solution available for Bitcoins and other cryptocurrencies.

Goldman Sachs is trying to secure a strong position in the digital asset industry. The investment bank is not only going ahead with its plan of trading desk but also exploring the options to provide custody solution for the cryptocurrencies. According to Chaves, Bitcoin has survived well without the involvement of big financial institutions and now after the success of bitcoin established players are pouring money in the crypto space.