Industry News Goldman Sachs appears to be embracing Blockchain and Cryptocurrency

Goldman Sachs appears to be embracing Blockchain and Cryptocurrency

August 11, 2020

Anyone who has followed the domain of cryptocurrency news knows that the Wall Street banking sector had a difficult history with the crypto domain. Goldman Sachs, in a fashion that is very similar to JPMorgan, its rival in the banking world, the only way to describe its approach to crypto is to call it a mixed bag. In 2017, the company cheered on the massive bitcoin rally.

This process took the price of a single BTC token to an astonishing 20,000 USD. However, many think that the company did a huge 180-degree turn and even betrayed those who are invested in crypto. This event took place in May 2020, when the bank created an analysis of crypto that included a very flash title of five reasons why.

The topic was the reason why the bank does not believe that BTC token should be considered an asset class. The moment quickly galvanized the crypto community which entered the debate about this completely inaccurate observation of the crypto market, especially the field of bitcoin.

Goldman Sach Movements

The big bank recently announced that it decided to appoint the new global head of the division of its digital assets. This follows in the steps of a similar decision by JPMorgan. This firm is even more ambitious as it seeks to explore the possibility of making its digital coin. This would be in a manner of speaking its (and thus traditional finance) answer to bitcoin BTC token.

Mathew McDermott, the new digital asset chief at Goldman Sachs stated that the company is continuing to assess the viability of creating their own digital token as well. Presently, however, these are still early days and McDermott did not want to give out any further details. The same applies to long-term plans that the bank has with the existing cryptocurrencies and how it would be able to add them to a possible Goldman Sachs token.


McDermott was also honest about the potential of the present blockchain technology to create a disruption in the existing traditional markets. This is something that is rapidly becoming more and more visible, even in very basic and layman terms. A plaything of domains like esports or tech enthusiast is now a serious business domain. The only difference is the fact that many see it as something that is still struggling to attain the level of professional and even industry recognition.

Goldman Sachs is presently trying to develop the technical elements that would use blockchain tech that would be used in the repo markets, mortgage, and credit domains. Besides, the company is also looking to make a blockchain and a crypto industry consortium that would deal with the potential benefits in what is clearly a resurgence of interest in the cryptocurrencies. So, even while the same disruption is ongoing, the traditional markets finally got the memo that they need to get on board of the same changes or miss the train altogether.

Institutional Interest

What is abundantly clear is that the institutional interest in the cryptocurrency space is skyrocketing faster than the prices are presently rising. The very fact that both JPMorgan and Goldman Sachs are developing their technologies on the basis of blockchain shows that they are not in a dilemma they had for the past several years.

Back then the notion of crypto becoming relevant was not on the table – instead, everyone was split whether or not it would even continue to exist. Many in these very institutions were certain that bitcoin and cryptocurrencies in general amounted to nothing more than either a scam or a ludicrously unstable system. Maintaining that position in 2020 seems next to impossible and this news only further corroborates the same concept.

Also, additional information points to a alive and developing crypto institutional scene. Chainalysis is a blockchain data firm that revealed recently how Wall Street giants are trading more and more of bitcoin and other cryptocurrencies. This is part of the wider trend in North America of feeding money into cryptocurrencies. The company believes also that the world is only starting with this pattern and that even bigger dealings are about to come.

Potential for a Backlash

The entry of institutions, which is now unmistakable, still is not all positive news for the crypto community. Some are fearful that the broad institutional adoption is going to shake the belief of some people that the whole notion of cryptocurrencies was to eliminate Wall Street and similar entities out of the equation.

In this regard, institutional adoption could be a big block for further adoption by non-institutional players. The implications on the price movements are also big because of the fact that Wall Street banks could wield billions that they move in the crypto markets. That would make them instant whales in the same domain and even give them free rein over the price movements.

Built to Last

No matter how relevant and potentially accurate these fears are, there is a deep and embedded sense of security in the concept of bitcoin and other digital networks that are truly decentralized. Even if Wall Street decided to purchase a lot of digital assets, the same would still benefit bitcoin in the long run. The same applies to any other cryptocurrency or altcoin on the market. Reasons for this are numerous, but most boil down to a simple process: bitcoin is a network designed to work on the fringes.

It is tough and resilient and comes with built-in mechanisms that have never been seen on the globe since the dawn of currency. That means that in essence, they have been built to withstand even this possibility and maintain their working capacity. There is no means of overtaking the network and no means of buying it out. Even trying something like that would include likely nothing more than a big Wall Street bank losing a whole lot of money and gaining nothing. Bitcoin has the ability to collapse upon itself if need be and then rise again. After all, it did it multiple times so far.

Source: Forbes