Yesterday, news broke that U.S.-based $90 billion multinational investment bank and financial services company powerhouse, Goldman Sachs, was ditching plans to eventually open up a Bitcoin trading desk as was initially reported. However, while speaking at the ongoing TechCrunch Disrupt 2018 conference, Goldman Sachs chief financial officer Marty Chavez called the claim “fake news”.
No, Goldman Sachs Isn’t Ditching Plans for a Crypto Trading Desk
At the TechCrunch’s TCDisrupt conference focused on “disruption from below,” the Goldman Sachs executive reportedly cleared the air regarding what he calls “fake news.”
Chavez’s comments were first shared by CNBC San Francisco Bureau Chief Sally Shin via Twitter.
“I think one of the wonderful things about us is that we get written about a lot. I never thought I would hear myself use this term but I really have to describe that news as Fake news,” Chavez said.
Cryptocurrency prices plummeted yesterday after news circulated that Goldman Sachs was postponing short-term plans to launch a cryptocurrency trading desk. Rumors that Goldman Sachs was preparing such a trading desk first surfaced as far back as October 2017.
Goldman has also been said to be considering offering a cryptocurrency custody service for investors in the near future.
Fear, Uncertainty, and Doubt (FUD) Due to False Reports
The cryptocurrency community responds by panic selling in the face of news reports considered to be “FUD,” which explains Bitcoin’s nearly 20% drop in 24 hours in the wake of yesterday’s news.
Prominent Twitter user IAmNomad who operates the “bot powered bitcoin market reports” account WhaleCalls called the Goldman Sachs trading desk delay news just that: “FUD.”
IAmNomad claims he spoke to a “friend at Goldman” who said he “doesn’t know what they are talking about,” in reference to the report originating from Business Insider, citing sources close to the matter.
Goldman CFO on Disruption From Below
Chavez spoke at the TechCrunch Disrupt 2018 conference about how customer interest determines which new disruptive technology becomes widely adopted by the mainstream – a conversation very appropriate in relation to cryptocurrencies like Bitcoin and its underlying blockchain technology.
The Goldman executive pointed to how mainframe computer manufacturers had assumed their clients would only want mainframe computers, but eventually clients began demanding mini-computers, then moved onto PCs, and now technology has moved to mobile devices.
Chavez explains that when businesses only cater to their current niche, they can miss out on emerging technologies. The same sort of situation is playing out with Goldman Sachs and cryptocurrencies. Traditional investment firms have long avoided getting into the cryptocurrency space until the market matured further and regulations were in place. However, given increased demand from institutional investors interested in investing in cryptocurrencies, Goldman Sachs and other big Wall Street banks may have no choice but to embrace the new financial technology.