Wall Street Banks Are Reportedly Backing Away From Cryptocurrency (siliconangle.com)

Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. While none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed. From a report: Multiple leading firms had either announced or were rumored to be entering the market earlier in the year, but few have come to fruition. The report said that "while none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed." Notable among those firms was Goldman Sachs. In May it was reported that the company was preparing to launch a bitcoin trading desk that would involve the bank using its own money to trade with clients in a variety of contracts linked to the price of bitcoin.

It was presumed that clients would include hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc. in 2017. Fast forward to December and no such bitcoin trading desk has been launched. In September it was reported that the plan had been abandoned, but a day later Goldman Sachs Chief Financial Officer Martin Chavez denied the report, saying that the bank's "exploration of the digital asset class is an ever-evolving process and is in response to significant client interest." He added that the report was "fake news."

Comments

Oddly bit coins fall is partly why it's safer now

[goombah99]

Bit coins sudden fall was triggered the day the bit coin futures market opened. No surprise. this allowed people to short bit coin (borrow other people's coins, and sell them, planning to buy them back later). So of course with all those sales in the market the price went down massively. And the herd instinct of Bitcoin faith followed, making a pile for the Short sellers. Further confirming this hypthesis is how the price also miraculously stabilized just about exactly one-short-contract duration later.

THe good news is this, while the futures market did create a way for all the shortsellers to take the slack out an overprices situation, overall it's great news. Futures makets provide hedging insurance as well as price arbitrage. This means much better liquidity and the ability of buy without risk (worried the price will collapse? Buy a short option. Worried the price will go up? sell a short option? )

So ironically, now it is finally safe enough for wall street.

Re:Oddly bit coins fall is partly why it's safer n

[JoshuaZ]

There's a legitimate reason to be annoyed with short-sellers. Short-sellers have an incentive to exaggerate bad things in a company and blow up little things into big things. Yes, a company trying to hide issues hves reasons to hate short-sellers but others have legitimate concerns also.

Re:Oddly bit coins fall is partly why it's safer n

[Zocalo]

This. The GP cites Elon Musk / Tesla, but completely fails to consider the huge amount of overstated negative press that gets thrown around every time Tesla makes even a minor misstep. Tesla is apparently one of the most shorted companies in US history, yet seems to be (mostly) doing the right thing and, when things do look a little marginal, getting themselves out of the fix. Who has the most to gain from this exaggeration, and thus according to Occan's Razor is most likely to be the prime contributor to it? Yep, the short sellers. They have their place, but it's far from as black and white as the GP seems to think.