Goldman Sachs’ Chief Financial Officer (CFO) R. Martin Chavez has addressed speculation on the group’s crypto trading desk, Bitcoin derivative and issues to do with the physical Bitcoin. He refuted claims the bank was ditching plans to set up a crypto trading desk.
Fake News Endemic
Mr. R. Martin Chavez was speaking to the press during the TechCrunch Disrupt Conference 2018 in San Francisco on Thursday, September 6, 2018. Calling it “Fake News,” Mr. Chavez said Goldman was creating a type of Bitcoin derivative in response to client demands.
“I never thought I would hear myself use this term but I really have to describe that news as fake news […] the next stage of the exploration is what we call non-deliverable forwards, these are over the counter derivatives, they’re settled in U.S. dollars and the reference price is the Bitcoin-U.S. dollar price established by a set of exchanges.”
The cryptocurrency market reacted negatively as the initial report that Goldman Sachs was ditching their plans went viral affecting Bitcoin and other leading cryptocurrencies. There has been speculation for a while now that the Wall Street giant was planning to create its cryptocurrency and this could have added fuel to the rumor.
Chavez came to the bank’s defense by poking holes on the report about the bank backpedaling on their original plans besides stating that they did not fix any timelines on their plans.
“When we talked about exploring digital assets, it was going to be an exploration that would be evolving over time. Maybe someone who was thinking about our activities here got very excited that we would be making markets as principal and physical Bitcoin, and as they got into it they realized part of the evolution but it’s not here yet.”
On December 21, 2017, Bloomberg reported that Goldman Sachs Investment Bank, which was already clearing Bitcoin Futures launched by CME and CBOE, was in the process of setting up a cryptocurrency trading desk.
Concerns about Bitcoin’s security, volatility and where to store digital assets has been the main reason institutional investors are not warming up to the crypto scene. It is the expectation that Goldman Sachs was entering the market that kept hopes alive leading to last year’s price surge. Bitcoin was struggling at around $6,400 on Thursday, down from the high of $20,000 in December last year, a drop of over 65 percent this year.