At the beginning of 2018, Bitcoin was riding high and Wall Street investors wanted a piece of the action. However, it seems the numerous delays that have prevented their entry into the cryptocurrency domain and the continued drop in bitcoin prices has cooled down Wall Street’s desires to play with cryptocurrencies.
The result is that many Wall Street firms that were planning an entry into the cryptocurrency market have halted their efforts as of now.
Earlier this year, there were several big Wall Street firms that were involved in bitcoin projects. These included Morgan Stanley, Barclays, and Goldman Sachs. Goldman Sachs was the first Wall Street firm to start clearing Bitcoin futures.
This was supposed to be followed by a full digital asset trading desk that would offer non-deliverable forwards (NDF) which are Bitcoin derivatives. Unfortunately, it seems no one is interested in the NDF product while Goldman Sachs is being quiet on future plans.
Many of the other firms are also quietly delaying their entry. Morgan Stanley is already supposed to be fully ready to start trading but has not done so. Citigroup is supposedly trading only by proxy while Barclays has lost its top two executives that were supposed to explore the cryptocurrency market.
The main reason for this is the crashing prices. Bitcoin started off the year at $20,000 but faced a bloodbath in 2018 which has caused the cryptocurrency to drop to $4,000. This massive drop in value is a huge reason why Wall Street firms have withdrawn. However, there are also other factors that make big institutions hesitate at entering the crypto market. This includes the lack of regulatory guidance and the many investigations into the sector.
Optimism Still Present
However, despite all of the hesitation, many cryptocurrency supporters are still believe that things will turn around quickly. Crypto supporters state that the 2018 crash will clear out all the scammers and stabilize the price of Bitcoin. It would also allow for institutions to better prepare their entry into the market since they won’t be jumping in during a time of high volatility.
One of the notable contributions to better infrastructure is by Intercontinental Exchange Inc. which announced that it had created a suite of services for better selling and buying of digital assets for both normal consumers and institutions.
It appears as if progress is coming to a halt, yet nothing could be further from the truth The bear market is going to allow many of these institutions to build the proper foundations without rushing to build out infrastructure without adequate testing for fear of missing out on a gold rush.
Eugene Ng, founder of crypto hedge fund Circuit Capital
