New Bloomberg Report Shows Wall Street Banks Shun Bitcoin, Distance Away from Crypto Markets
In a recent report released by Bloomberg, recognized Wall Street firms such as Goldman Sachs, Morgan Stanley or Barclays, are still far from launching crypto-related products.
During 2018, several analysts believed that these institutions were going to release crypto-related products to the market as soon as in the first part of 2019. Nevertheless, these products might take longer to be released into the market.
According to Daniel Gallancey, the CEO of SolidX, the market has ‘unrealistic expectations’ about these institutions entering the crypto space.
On the matter, he commented:
“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business. That was top-of-the-market-hype thinking.”
SolidX is one of the companies that is presenting a proposal for a Bitcoin exchange-traded fund (ETF). In 2018 many Bitcoin ETFs have been rejected or delayed by the U.S. Securities and Exchange Commission. In February, the SEC could approve (or not) the first crypto ETF.
According to Bloomberg, Goldman Sachs has just 20 clients for its non-deliverable forward (NDF) bitcoin product. At the same time, there were some reports pointing that the company partnered with BitGo to build a new crypto solution Although the hype around these companies, there are no bitcoin trading activities being conducted by Goldman Sachs.
Furthermore, Morgan Stanley has also been trying to build its own crypto-related solutions. Some of them included swaps tracking Bitcoin futures for months. At the moment, it has not traded even one contract.
As reported by The Block, there are some sources and insiders that cite a lack of institutional interest. At the same time, there is no regulatory clarity in the market for institutions and companies to start investing in virtual currencies as retail investors did during the last years.
A company that was able to continue with its plans to launch Bitcoin futures is the Intercontinental Exchange. The Bakkt platform will allow investors to have access to Bitcoin-settled futures contracts. This platform is expected to be launched in January 2019. However, it might be delayed for the first weeks of February.
It will be important for the demand to start growing and a regulatory framework to be built around virtual currencies and blockchain technology. With the infrastructure already being built and planned, institutions and traditional investors will have an easy entry to the crypto market.