While the fact that the crypto market has taken a serious hit today is clear to anyone, reports that this is tied directly or solely to Goldman Sachs apparent cooling on creating a crypto trading desk might be misguided, according to a blog post on Crypto Slate.
Sam Town, writing for the cryptocurrency investment publication, concedes that while the crypto market is indeed intensely reactive to news, but contends that the lukewarm comments that Goldman-Sachs has made are simply not enough to have such a profoundly negative effect on crypto trading. Instead, Town blames the ongoinig liquidation of Silk Road assets as the major culprit driving the market into the red.
Sam Town points to the fact that Goldman-Sachs actual comments do not quite explicate that the corporation is not planning on developing a crypto trading desk.
These reports have been intimated by Business Insider, which merely reference ‘people close to the matter’ as a source of Goldman-Sachs cooling on their crypto plans rather than any definitive announcement by the financial giant. Furthermore, in the CNBC coverage of the matter, Goldman-Sachs did not make a strong statement one way or the other, stating, 'we have not reached a conclusion on the scope of our digital asset offering," which does not necessarily indicate that it is completely pulling back from the crypto space.'
Rather than accepting these reports as an explanation for the massive sell-off, Town points to the fact that 111,000 BTC are being washed off of wallets associated with the seized darknet marketplace the Silk Road. Town asserts that this amounts to a massive number of Bitcoin hitting the marketplace at once, upon which it is being mixed, hidden, and sold.
Almost $1B in Bitcoin Moved Around in Silk Road Wallet Addresses - Cryptovest https://t.co/ArSSzi0dge— News Bitz (@Newz_Bitz) September 5, 2018
Supporting this notion is the fact that crypto commentators maintain that institutions are still interested in expanding into the crypto space, and historical precedent, such as the similar event which occurred when Mt Gox dumped 16,000 Bitcoins following the exchange’s bankruptcy earlier this year, an example that Town points to as ‘the actions of whales within liquidating large amounts of Bitcoin’ driving crypto price plummets.
No matter the reason, the hit the market is taking is leading to not only investor despair, but accusations of insider trading and price manipulation.