Bitcoin bloodbath -- cryptocurrency plunges 20% in two days

September 6, 2018•2 Minutes
Zoya Faessler Zoya Faessler

Bitcoin investors are getting their digital butts kicked lately. Hard. Bitcoin prices have plunged more than 20% in the past two days.

Ethereum, Litecoin, Ripple and other cryptocurrencies have suffered similarly large drops. The reason for the latest pullback? A Business Insider report that investment banking giant Goldman Sachs (GS) may be dropping plans to launch a crypto trading desk.

Goldman Sachs told CNNMoney though that it hadn’t made a firm decision about bitcoin or other cryptocurrencies just yet.

“In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering,” Goldman Sachs said in a statement.

But if Goldman Sachs is pulling back, that is not good news.

Naeem Aslam, chief market analyst with ThinkMarkets UK who is bullish on bitcoin, said in an email that “there is no doubt that the bitcoin price is supported by this hype that institutional banks are going to get involved.”

Stories first surfaced about a possible Goldman Sachs push into bitcoin (XBT) and other cryptocurrencies last December, shortly after the two big futures trading companies — the CBOE(CBOE) and CME (CME) — set up exchanges for bitcoin contracts.

Goldman Sachs confirmed in May that it was thinking of using its own money to start trading bitcoin, according to the New York Times.

Bitcoin prices, which were hovering near a record high of about $20,000 in December, have lost more than two-thirds of their value since then and currently trading at around $6,400.

Hussein Sayed, chief market strategist at currency brokerage FXTM said in a report Thursday that it’s possible prices could fall below $5,000.

So it might make sense for Goldman Sachs to take a more cautious approach to this extremely volatile market. Most of the news about bitcoin has been negative lately.