Following a breakout year for cryptocurrencies, 2018 has been extremely challenging — to say the least.
With Bitcoin and numerous altcoins hitting all time highs in December, a sobering market correction followed and the markets have only started to settle midway through this year.
There have been many reasons for the cryptocurrency markets being battered by bearish sentiments across the board.
However, having passed the midway mark of the year, there are increasingly encouraging signs that institutional investors are changing their tune once again — hinting that mainstream adoption is around the corner.
Furthermore, Bitcoin has reached market cap levels last seen in December, with 46 percent of the total market dominated by the preeminent cryptocurrency. With its price holding steady around $7,500, there are signs that a bearish market may be coming to an end.
Let’s take a look at the biggest Wall Street players that seem to be laying the foundation needed to enter the crypto markets on a grand scale.
Blackrock puts feelers out
In July, Blackrock — the world’s largest exchange-traded fund (ETF) — announced that it has launched a working group to assess the potential of investing in Bitcoin.
The cross-industry working group is exploring a number of investment options, but it’s understood that Bitcoin futures are on the agenda. It marks a change in sentiment from Blackrock in particular, considering that CEO Larry Fink had described Bitcoin as ‘an index of money laundering’ in October.
Blackrock’s move could be described as a preemptive strike to avoid missing the crypto bus. Goldman Sachs is making headway with cryptocurrency involvement and Blackrock is following suit.
While Blackrock is understood to have launched a blockchain working group in 2015, the latest move is examining what its competitors are doing in the space. Clearly, everyone is trying to suss out what their peers are doing in terms of cryptocurrency adoption.
Goldman Sachs — forging ahead
Since late 2017, there had been murmurs of the investment and banking firm launching a cryptocurrency trading desk. This was later refuted by CEO Lloyd Blankfein, although he revealed the company had invested in a crypto trading desk back in 2015.
Nevertheless, Goldman Sachs has been making inroads toward crypto adoption throughout the year. Thus, in April, cryptocurrency trader Justin Schmidt was hired by the firm in response to client interest in the space.
The following month, Goldman Sachs executive Rana Yared confirmed that the company intends to buy and sell Bitcoin — after concluding the preeminent cryptocurrency was “not a fraud.” Yared said the company ‘resonated’ with clients wishes to hold Bitcoin or Bitcoin futures:
“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value.’”
What is more, a couple of former Goldman Sachs executives have moved into the cryptocurrency space.
Former executive director Priyanka Lilaramani joined Maltese crypto startup HOLD as its new CEO in May, following 10 years of service as a director at the firm. Prior to that, former Goldman Sachs executive Breanne Madigan joined crypto wallet Blockchain.com in April.
Galaxy Digital founder Mike Novogratz also lured a former executive of Goldman Sachs, Richard Kim, to take over as CEO of the cryptocurrency merchant bank in April. It’s understood that Kim had been working on the firm’s crypto trading desk before he left.
Despite the apparent drain of crypto-inclined talent from Goldman Sachs, the company is forging ahead with its own plans in the sector.
In June, the company confirmed that it was planning the launch of a cryptocurrency derivatives trading desk. Goldman Sachs is already helping customers clear Bitcoin futures, according to COO David Solomon.
The move followed some positive comments from Blankfein in an interview with Bloomberg in June. The…
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