A top executive at Goldman Sachs wanted to pour oil on troubled waters on September 6 about a report that stated the bank’s plans to abandon the opening of a trading desk for cryptocurrencies. The Chief Financial Officer (CFO) of Goldman Sachs, Ramon Martin Chavez, announced it on the stage at TechCrunch Disrupt Conference in San Francisco that the news was fake news.
The CFO mentioned that the company is working on a type of bitcoin derivative because their clients want it. The company’s next stage is to explore a non-deliverable forward, which, according to Chavez, are over the counter derivatives, settled in USD and the reference price is the set of exchanges established bitcoin-US dollar price.
The price of bitcoin fell rapidly like a landslide after the initial report by Business Insider was uploaded earlier this week about Goldman Sachs abandoning their plans. For the past year, the Wall Street giant has been considering the launch of some cryptocurrency option for their clients. However, the bank’s policy regarding the same hasn’t been entirely clear.
The CFO defended the bank by not only rectifying this week’s report about the bank dialing back plans but also mentioned that there was never any timelines for this plan.
Chairman and Chief Executive Officer (CEO) of Goldman Sachs, Lloyd Craig Blankfein, tweeted on October 3, 2017, that the bank was:
“Still thinking about #Bitcoin. No conclusion - not endorsing/rejecting.”
The CFO of Goldman Sachs implied that the bank isn’t quite ready for physical bitcoins as there is a requirement for a reliable, safe custody solution before the bank can proceed with it. The bank has, however, been clearing future contracts related to bitcoin offered by the CBOE and CME since May and on top of that, they have been providing liquidity for those futures to their clients.
The problems with bitcoin’s volatility and security and a location to keep the actual assets have all been obstacles for institutional investors looking for an entry. According to CNBC, “The possibility of establishments like Goldman entering the market have boosted sentiment, and prices in the past year.”
Bitcoin price has decreased significantly this year and is still falling and struggling to keep up with the US$ 20,000 record price of 2017. At the time of writing, a single bitcoin equals US$ 6,403.57 which is not even close to the bitcoin record price.