Goldman Sachs – About the Influence Of (Fake) News

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It all started on September 5th when BusinessInsider published an article about Goldman Sachs’s decision. Soon after, the market reacted dramatically  to revealed information.

The plans

Goldman Sachs is one of the biggest American banks that has been interested in cryptocurrencies. In December 2017, an information portal Bloomberg informed that the banking giant was planning to open a desk to trade cryptocurrencies. The project was supposed to be finished by the end of 2018. As this information was released in December 2017, there is a high probability that it influenced on cryptocurrency market at that time. Current situation only proves it.

Latest dump on the market

On September 5th, BusinessInsider published information from anonymous informant who claimed that Goldman Sachs withheld the plans to get involved in cryptos. The decision was explained as ‘the regulation of cryptocurrencies and regulatory landscape is still unclear’. Instead of opening a desk to trade Bitcoin and other alts, Goldman Sachs was supposed to allegedly focus on “a custody product for crypto meant to better service large institutional clients.

When this piece of information spread, the market reacted strongly. The price of Bitcoin fell from $7 387,76 to $6,409,72 in just 24 hours due to CoinMarketCap. The 13% loss in this crypto’s value was clearly caused by the hot news.

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It wouldn’t be the first time when some bank’s decision influences cryptocurrency price and traders’ behavior causing panic sell.

Official position in the case of Goldman Sachs

Marty Chavez, who is CFO and former CIO of Goldman Sachs, has decided to comment on the whole situation during 2018 TechCrunch Disrupt in San Francisco.

During the talk, Chavez admitted that he was surprised by the whole situation:

“I never thought I’d hear myself actually use this term, but I’d really have to describe it as  fake news.”

He also admitted that when the Board of Goldman Sachs had been talking about exploring digital assets, they knew it would be “an exploration that was evolving over time.”

Chavez also reminded that Goldman Sachs had in offer Bitcoin future contracts since May 2018. The next step in cryptocurrency exploration for the bank was to offer Bitcoin Contracts For Differences (CFD). But when the real “physical” Bitcoin comes to way, Chavez highlights that it is “something tremendously interesting and tremendously challenging from the perspective of custody.”
It seems like there is still a long road for Goldman Sachs to work on cryptocurrencies themselves as Chavez said: “We don’t see yet an institutional grade custodian solution for Bitcoin. We’re interested in having that exist, and it’s a long road.”

The moral

The moral of this situation is simple, but maybe for some forgotten – trust only the news from trusted sources.

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