Wall Street Money is like a holy grail for crypto markets and everyone on the street is waiting for its arrival on the crypto-street. While the wait continues and markets still far away from its all-time highs, it looks like a lot of Wall Street Firms that had announced their crypto plans are either differing or shelving it.
Goldman Sachs, Morgan Stanley, Barclays move slow and steady towards cryptos
According to a recent report published by Bloomberg, plummeting crypto markets and regulatory uncertainty has forced a lot of Wall Street firms and Banks to shelf their crypto plans. Even though a lot of them continue to develop a trading infrastructure, the pace of it is definitely gone down reason being collapse in the value of virtual coins.
Goldman Sachs which was among the prominent names to have announced its crypto plans seems to have slowed down its setup process to a pace where is progress is barely visible and noticeable according to people familiar with its crypto business. Many people in the industry are now found saying that it was idealistic to have expected last year’s frenzy to translate into a Wall Street crypto offering but nothing materialized once the market started plummeting.
Goldman remains the point of focus for expectations of an establishment embrace of crypto. The firm was among the first on Wall Street to clear Bitcoin futures and people familiar with the matter said last year it was preparing a trading desk—the bank even provided its bankers to the New York Times for an interview on its plans. The bank has yet to offer to the trade of crypto and has gained little traction for its NDF product, having signed up just 20 clients, according to people familiar with the matter. Justin Schmidt, who was hired to head its digital-asset business, said at an industry conference last month that regulators are limiting what he can do. Still, Goldman plans to add a digital-assets specialist to its prime brokerage division, the person said.
Its not just Goldman, Morgan Stanley, the other wall street giant, which hired Andrew Peel as its head of digital assets earlier in the year, has been technically prepared to offer swaps tracking Bitcoin futures since at least September, but so far hasn’t traded a single contract, according a person familiar with the matter. A person with knowledge of the business said in September the contracts would be launched once there was enough evidence that there is significant institutional client demand.
Citigroup too is part of the Wall Street Wolf Pack. The bank too has not traded any of the products it designed for cryptocurrencies within existing regulatory structures, according to a separate person with knowledge of its business.
The story remains the same across Atlantic where Barclays Plc, which had spoken about client interest on a cryptocurrency trading desk, is almost back to square one. Earlier in the yea,r the British bank had hired two former oil traders—Chris Tyrer and Matthieu Jobbe Duval—to evaluate the crypto business but according to sources Barclays has laid them off. Tyrer, who led the digital-assets project, left in September, while Jobbe Duval followed two months later, according to people familiar with the matter. Barclays currently has no plans for a crypto trading desk, according to a spokesman.
There have been few quotes from the street that describe the situation
“The market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business,” said Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, which hopes to launch a Bitcoin ETF in the U.S. “That was top-of-the-market-hype thinking.”
Another one coming from Eugene Ng, a former Deutsche Bank AG trader in Singapore who has set up crypto hedge fund Circuit Capital.
“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.”
Will the market revival get these firms back in the game or its regulatory clarity that will do the job is something that one will have to wait and watch? But one thing is for sure it’s not going to be for Wall Street Money to find its way into cryptocurrencies
Will the Wall Street Money reach Crypto Street despite all roadblocks? Do let us know your views on the same
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.