Bloomberg published a report on December 23 the giant finance companies have backed out of their plans of investing in the Blockchain currency businesses. Most of the firms have slowed down the momentum of their crypto activities.
2017 had seen the crypto market reaching the zenith. The popularity and novelty of Bitcoin were overwhelming. The wall street firms had started showing interest in developing their own crypto teams. Many of them are still building the infrastructure, but have paused their efforts.
In 2018, the market started crashing down, different issues of regulations, ICO frauds, hacking, energy problems related to the mining of the coins came up. The scenario started to change. The companies like Goldman Sachs, Morgan Stanley, Citi Group Inc., Barclays Bank Plc. and Fidelity Investments had showed interest in building the crypto assets.
Citi Group Inc. according to the Bloomberg’s report was planning to launch an innovative digital receipt, that would have enabled the proxy trading of altcoins without the ownership of the underlying coins in September, but the firm has not started the trading yet.
Morgan Stanley’s plan of launching swaps tracking Bitcoins under Andrew Peel, head of the digital assets, is still not taking off. While the company is ready with the required technical infrastructure. The company is waiting for a demand by institutional clients.
The Barclays Bank Plc. had brought onboard, Chris Tyrer and Matthieu Jobbe Duval both former oil traders to develop a crypto desk. Chris Tyrer left the bank in September and Duval followed him after two months. the project of digital assets at Barclays has come to a standstill.
Goldman Sachs was one of the first major finance companies to launch a product based on the blockchain markets. The wall street firm had a plan to launch the Bitcoin futures. The report also mentions the rumors that the firm was planning to start a separate crypto market desk. Goldman Sachs in partnership with Digital Galaxy invested $57 million investment in a company called BitGo Holdings Inc. Yet crypto trading is not offered by the bank.
The article quotes Daniel Gallancy, CEO of SolidX Partner, “The market had unrealistic expectationsthat Goldman or any of its peers could suddenly start a Bitcoin trading business.” According to him, that was atop of the market hype thinking.
There are major two reasons of the market to slowdown on its blockchain activities. First, majority of the countries are not embracing the altcoins. The regulators don’t have clarity in the policies. This issue is arising because the crypto market is quiet new to the governments. Most of the governments have not yet acquired full knowledge about technology as it is still on the stage of evolution.
The second reason is the steep fall of the prices. The market cap fell down by approximately $700 billion. These funds have already dried out the blockchain firms, the miners are opting out as the mining rigs are becoming less and less profitable. This slump in the market has brought in the slack in blockchain activities of the investment banks and the other finance companies.