Bitcoin Price Crash Paused by Goldman Sachs Entry into the Market

Bitcoin fell over $2,000 on Wednesday. The price fell from $59,400 to nearly $57,000 in just five minutes of trading. At 17:39 on Wednesday, the coin was exchanging hands at $59,122, a gain of 0.63% over the last 24 hours.

Market analysts have blamed the quick fall on overleveraged long positions. The plunge liquidated about $600 million worth of extended bullish contracts across major futures exchanges. After the fall, Bitcoin maintained a short-term price floor at around $58,000. Now, the king cryptocurrency is close to retesting $60,000.

The respite to bulls came from Goldman Sachs which announced that it would soon offer its first investment services for Bitcoin and other cryptocurrencies to clients of its private wealth management group.

This latest development from Goldman Sachs was reported by media outlet CNBC.

Mary Rich, global head of digital assets for Goldman’s private wealth management division, confirmed in an interview with CNBC that they would offer clients cryptocurrency investment services. CNBC quoted Rich as saying:

We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near-term.

She explained that the bank was going to offer a diverse range of investments within the cryptocurrency sector to its clients. She said:

Goldman is looking at ultimately offering a “full-spectrum” of investments in bitcoin and digital assets, whether that’s through the physical bitcoin, derivatives or traditional investment vehicles.

Rich explained further that the change in policy from the bank is a result of increasing interests in Bitcoin and other cryptocurrencies by investors. Largely due to the crypto-boom that occurred due to the pandemic and the recent fears of inflation. She added:

There’s a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that.

Like major banks and financial experts, Goldman Sachs has changed its tune from Bitcoin skeptic to embracing the crypto market.

Morgan Creek Digital co-founder Anthony Pompliano commented:

Eventually they will have to offer bitcoin services to everyone.

The move will make Goldman the second major lender to open up the world of cryptocurrency to its clients, and it comes weeks after a pioneering move by Morgan Stanley. Many traditional finance firms have had no option other than integrating crypto services or risk being left behind by the ever-growing crypto market. This is noticeably in contrast with US Federal Reserve whose chairman has maintained that crypto-assets are merely speculative.

Following the Goldman Sachs’ news Bitcoin was bullish. A pseudonymous investment analyst on Twitter noted that Bitcoin’s latest decline took a quick pause after Goldman Sachs announcement to resume its upward momentum. He said:

BTC experienced a -26% retrace after rejecting from ~$57500 in February. Then BTC experienced a -18% retrace after rejecting from ~$61K in mid-March. Key takeaways: BTC is rallying higher after each retrace; [and] it enjoys shallower retraces upon rejection at higher prices.

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Source: https://www.earnforex.com/commodities/bitcoin-price-crash-paused-by-goldman-sachs-entry-into-the-market/