Goldman Sachs is deliberating a plan to hold bitcoin and other digital currencies on behalf of funds betting on cryptocurrency, according to a report.
The plan would see the banking giant take its most significant step yet into the nascent world of digital assets, and has resulted in bitcoin analysts predicting positive market movements for the cryptocurrency due to increased investor interest. The crypto fund would reduce risk for investors and could potentially lead to other cryptocurrency-based ventures
An inside source revealed the plans to Bloomberg, who said that a timeline for launching the custody fund is yet to be put in place. A spokesperson for Goldman Sachs told the publication: “In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.”
Bitcoin’s volatile history in pictures
1/8 Satoshi Nakamoto creates the first bitcoin block in 2009
On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled ‘Bitcoin: A peer-to-Peer Electronic Cash System’
Reuters
2/8 Bitcoin is used as a currency for the first time
On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today’s prices
Lazlo Hanyecz
3/8 Silk Road opens for business
Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin
4/8 The first bitcoin ATM appears
On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash
REUTERS/Dimitris Michalakis
5/8 The fall of MtGox
The world’s biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed
Getty Images
6/8 Would the real Satoshi Nakamoto please stand up
In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim
Getty Images
7/8 Bitcoin’s big split
On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin’s underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash
REUTERS
8/8 Bitcoin’s price sky rockets
Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year
Reuters
1/8 Satoshi Nakamoto creates the first bitcoin block in 2009
On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled ‘Bitcoin: A peer-to-Peer Electronic Cash System’
Reuters
2/8 Bitcoin is used as a currency for the first time
On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today’s prices
Lazlo Hanyecz
3/8 Silk Road opens for business
Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin
4/8 The first bitcoin ATM appears
On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash
REUTERS/Dimitris Michalakis
5/8 The fall of MtGox
The world’s biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed
Getty Images
6/8 Would the real Satoshi Nakamoto please stand up
In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim
Getty Images
7/8 Bitcoin’s big split
On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin’s underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash
REUTERS
8/8 Bitcoin’s price sky rockets
Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year
Reuters
The Wall Street firm has previously expressed interest in cryptocurrency and was rumoured in May to be setting up a bitcoin trading desk. The venture, first reported by The New York Times, would make Goldman Sachs the first major Wall Street bank to open a cryptocurrency trading desk.
Cryptocurrency analyst Matthew Newton, who works for the online trading platform eToro, told The Independent at the time that the news “shouldn’t come as a huge surprise to anyone who has been paying attention to cryptocurrencies.”
Bitcoin’s recently experienced a month-long price rally, which came crashing to a halt at the beginning of August when the cryptocurrency fell by 15 per cent in less than seven days. Having briefly traded above $8,000 at the end of July, a single bitcoin is worth $6,988 at the time of writing.
Despite this price drop, experts and analysts are optimistic about bitcoin’s future.
“Having followed bitcoin and other cryptocurrencies for the last year and a half, I came to a realisation that the crypto markets are maturing and are mimicking traditional equity markets in terms of sentiment,” Isaac Marks, a cryptocurrency enthusiast and co-founder of blockchain-based recruitment firm Bhired, told The Independent.
“All markets are driven by sentiment and the cryptocurrency world is no different. The players are all the same – human beings reacting to present and mostly forward-looking price analysis. We think that the prices can potentially reach $10,000 to $12,000 in the near term as bad projects and ICO’s are being vetted out, and the crypto community begins to instil trust and confidence by taking self-regulating action.”
Other analysts were less positive about bitcoin’s prospects, with BlockStar CEO Christian Ferri warning that the latest drops may precede even lower prices.
“We’ll still see some volatility in the next few months, with the possibility of the price dropping even further than the recent $6,000 low, to around $5,000, before bitcoin can start its next run,” Ferri told The Independent.
“There were no major news or updates that could justify the recent price spike to over $8,000. It’s probable that the recent high was caused by new money coming into the market, creating a short squeeze for traders buying bitcoin to cover their losses.”
