Business Insider reported on Wednesday that Goldman Sachs Group Inc was pulling back on near-term plans to set up a crypto trading desk, while trading platform ShapeShift AG said on Tuesday that it will begin asking users for personal information - a policy that may drive away customers who value anonymity.
But since then, its value has steadily dropped, and following a number of crashes, the most popular cryptocurrency is now worth less than $7,000.
Major cryptocurrencies plunged on the news.
Bitcoin BTC=BTSP was trading down almost 4.8 percent at $7,007 on the Luxembourg-based Bitstamp exchange on Wednesday. As CCN reported, Goldman Sachs CEO Lloyd Blankfein repeatedly denied that the firm had any plans at all to launch a bitcoin trading desk, nearly up until the day that the bank revealed that it had been quietly assembling such an operation.
Plans were in the works to get the desk ready by the end of June 2018.
Concurrently, the investment bank (which is already a market maker for Bitcoin futures and contracts for difference) plans to forge ahead with plans for developing a cryptocurrency custody solution - a service which Coinbase and BitGo are also working on.
The moves follow last month's decision by USA regulators to reject another round of Bitcoin exchange-traded fund proposals.
And with Goldman's refusal to continue with the trading desk, a lot of hopes and dreams are again being dashed to the ground. "At this point, we have not reached a conclusion on the scope of our digital asset offering".
The CFO continued by reaffirming Goldman Sachs' exploration into the Bitcoin market, suggesting that interest into the area from the bank's clients has been high, and they are keen to have tradeable Bitcoin products in the near future. Also, Goldman Sachs is engaged in developing Bitcoin derivatives to satisfy the clients' needs.
Goldman has been making a clear and steady effort to capitalize on crypto markets. News related to institutional traders tends to have some impact on bitcoin's price - indicating that there is an appetite for institutional involvement in the cryptocurrency world.