Goldman Sachs CFO claims cryptocurrency “fake news”

Goldman Sachs claims "fake news"

Goldman Sachs CFO claims cryptocurrency “fake news”

Set up your BitMEX trading account in 30-seconds

Martin ChavezMartin Chavez, CFO of Goldman Sachs, told CNBC that news reports earlier this week of the investment bank dumping plans for a cryptocurrency trading desk were “fake news.”

That would also be news to tens of thousands of bitcoin and altcoin investors who appear to be getting out of cryptocurrency in big numbers in the past several days.

Crypto market volatility

 

CFO of Goldman Sachs claims fake news“I never thought I would hear myself use this term but I really have to describe that news as fake news,” Goldman Sachs Chief Financial Officer Martin Chavez said on stage at the TechCrunch Disrupt conference in San Francisco yesterday.

As the cryptocurrency market dropped like a stone in the past few days, media pointed to Goldman Sachs’ hesitancy about cryptocurrency trading as a big reason for the market plunge.

Bitcoin traded as low as $6,381 in the past 48 hours while Ethereum dropped 9%, Litecoin 7.1% and Ripple more than 7.7%. The overall cryptocurrency market shed an estimated 20% of its market capitalization within 48 hours as it tries to figure out what direction to move next.

Bitcoin, altcoin, who’s got the coin?

 

Market experts offer various theories for this week’s wild market cap swings.

Jimmy Zhong, CEO, IOSTJimmy Zhong, co-founder and CEO of enterprise-grade blockchain infrastructure IOST said “Currently, the crypto markets are heavily correlated to the price of bitcoin because most altcoins are traded against bitcoin. When traders trade altcoins, they are exposed to both their volatility and bitcoin’s volatility. Meanwhile, if traders are just trading bitcoin, they’re only exposed to bitcoin’s volatility. This correlation is unlikely to last forever, but for now, it is extremely clear and explains why altcoins struggle more in a bear market (they go down when altcoins go down and when bitcoin goes down).”

Zhong said some cryptocurrency traders including institutional investors, may be moving to safer markets because of declining sentiment for global markets.

“Because bitcoin continues to lead the market and has shown a lot of strength in recent months, people are looking at it as a relatively safe asset in comparison to altcoins. A risk-off strategy is to move from altcoins into bitcoin, and an even more risk-off strategy is to then move from bitcoin into fiat,” Zhong added.

Still a volatile, immature market

 

Andy Bromberg, CEO of CoinlistAndy Bromberg is co-founder and president of CoinList, which helps digital asset companies manage their token sales and investor outreach.

“Today’s cryptocurrency markets remain immature and volatile — large moves by small numbers of traders have the ability to significantly move the markets. Those trades can be the result of fundamental decisions or reactions to small pieces of news,” Bromberg said.

“We shouldn’t put too much stock in the short-term movements of these markets until they reach a more developed stage, instead focusing today on the long view and high-level trends over time,” he added.

Until then, cryptocurrency investors are stuck with riding the wave of volatility inherent in the new digital token marketplace.