Why Goldman Sachs Suddenly Starting Bitcoin Business is Unrealistic: SolidX

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According to Daniel H. Gallancy, the CEO of SolidX Partners, it
was unrealistic to anticipate Goldman Sachs to run a Bitcoin
business before the year’s end.

Speaking to Bloomberg, Gallancy, who has been working with a
major investment firm in VanEck to introduce a Bitcoin exchange-
traded fund (ETF) in U.S. markets , said that investors prematurely
expected Goldman Sachs , Morgan Stanley, and other financial
institutions in the U.S. to provide Bitcoin custodial solutions and
operate digital asset exchanges.
He said:
"The market had unrealistic expectations that Goldman or
any of its peers could suddenly start a Bitcoin trading
business. That was top-of-the-market-hype thinking."

Goldman Sachs is a Bit Different
Morgan Stanley, Citigroup, and many other large banks that were
rumored to launch Bitcoin-related ventures by the end of 2018
were most likely not going to aggressively enter a market built
upon an asset class that is still at its infancy.
But, Goldman Sachs, the $61 billion investment banking giant, has
been preparing to offer Bitcoin services to its clients for awhile.

As CCN reported in June, for the first time in the company’s
history, David Solomon, who is now the CEO of Goldman Sachs,
directly confirmed that the bank has been clearing some Bitcoin
futures for its clients with the intent of establishing a
cryptocurrency trading desk in the foreseeable future.

“We are clearing some futures around Bitcoin, talking
about doing some other activities there, but it’s going
very cautiously. We’re listening to our clients and trying
to help our clients as they’re exploring those things too.
Goldman Sachs must evolve its business and adapt to
the environment,” said Solomon in an interview with
Bloomberg TV in China.

Although Goldman Sachs could clear Bitcoin futures with the
assistance of CME , CBOE, and other established futures markets in
the U.S. market, it cannot hold onto the cryptocurrencies owned
by its investors or invest in the asset class on behalf of its clients
without obtaining an approval to operate as a custodian.
In November, Justin Schmidt, a Goldman Sachs executive, said
that the bank has not been able to receive approval from local
financial authorities and in a period in which a bill pertaining to the
legal definition of digital assets is still pending, it is risky for the
institutions to provide services around the market.

“Custody is this foundational piece that is absolutely necessary.
Custody is part of an overall integrated system where different
parts need to work well with each other and safely with each other
and you have to be able to trust all the different parts in that chain,
from buying something to transferring it to storing it in for the
long-term,” Schmidt said at the time.

Can Investors Expect Bitcoin Services in 2019?
It could have been unrealistic to expect Morgan Stanley, Citigroup,
and many major banks in the global financial landscape to
abruptly begin providing services on top of Bitcoin, and many of
these institutions also likely saw a PR opportunity to alter their
public image as some innovative and forward-thinking
organizations.

However, some institutions like Fidelity and Goldman Sachs are
seriously considering the long-term prospect of the market and in
the long run, the two institutions could serve investors in the
digital asset market.

https://www.ccn.com/