A 15% plunge! Bitcoin broke through six barriers in early trading. Goldman Sachs may abandon its digital currency trading plan

The first release was at 23:22 on the 5th, and the first update was at 4:24 on the 6th, adding cryptocurrency quotes, EU news, and analysis and comments. Currently updating the morning quotes again.

In the early Asian session on the 6th, under the continued influence of negative sentiment, cryptocurrencies such as Bitcoin experienced another sharp drop.

Bitcoin broke through six barriers in early trading, hitting a low of $6,253.30. Other major cryptocurrencies also followed Bitcoin's decline. Coinmarketcap data showed that the overall market value of cryptocurrencies shrank by nearly $36 billion in 24 hours, now at $203.2 billion.

The following is the original text at 4:24:

Cryptocurrency is facing bad news again. The unclear regulatory situation may temporarily stop Wall Street giants who want to enter the market.

On Wednesday, September 5, Eastern Time, Business Insider reported, citing people familiar with the matter, that because the regulatory framework for encrypted digital currencies is still unclear, Goldman Sachs will abandon plans to open a cryptocurrency trading room in the near future and instead prioritize how to participate in such markets, and may restart such plans at some point in the future.

The report also mentioned that Goldman Sachs is currently focusing on other projects, including cryptocurrency custody products, that is, Goldman Sachs holds cryptocurrencies on behalf of some large fund clients and may track their price changes. Many market observers have previously pointed out that large institutions feel comfortable trading Bitcoin, and what they need is a reputable custody service to ensure the safety of their positions.

Michael DuVally, a spokesman for Goldman Sachs, later told Reuters: “At this stage, we have not concluded on the scale of our digital asset services.” In a statement to CNBC, Goldman Sachs said: “In response to client interest in a variety of digital products, Goldman Sachs is researching how to best serve this space.”

If the above news is true, it means that the first Bitcoin trading room of a Wall Street institution will be a long way off. About four months ago, the New York Times and other media broke the news that Goldman Sachs planned to include cryptocurrency trading in the trading room and start trading limited derivatives on a small scale, mainly trading Bitcoin futures, and also considering trading Bitcoin spot if approved by regulators.

On the day when the news of Goldman Sachs abandoning the plan came out, Bitcoin erased its gains since this week and resumed its decline on Wednesday, falling more than $7,000 during the session. The Bitcoin trading price on the Bitstamp platform once fell below $6,900, hitting a new low since the beginning of this month, and fell more than 6% in the last 24 hours. As of the latest update, Bitcoin has returned to above $6,900, and the 24-hour decline has narrowed to less than 6%.

Brian Kelly, founder and CEO of cryptocurrency hedge fund BKCM, believes that the Goldman Sachs report is the reason for the negative sentiment in the Bitcoin market on Wednesday morning Eastern Time.

"They (Goldman Sachs) are not part of this ecosystem yet, but to some extent they are representatives of a group of institutions, which is negative (news)."

As Bitcoin fell, most of the other top ten cryptocurrencies by market capitalization fell, and most of them fell more than Bitcoin.

As of the latest update, according to statistics from the Coinmarketcap website, except for the stablecoin Tether (USDT), the other nine major digital currencies have all fallen in the past 24 hours. Except for Bitcoin and Stellar, seven currencies including the second largest digital currency Ethereum (ETH) have all experienced double-digit declines, with declines of more than 10%. EOS, which had the largest decline, fell by nearly 17%.

Blockchain concept stocks in the U.S. stock market also fell collectively. During the session, Chinese concept stocks Renren fell 8.8%, Marathon Patent fell 7.3%, Overstock fell more than 7%, LightInTheBox fell 6.8%, Riot Blockchain fell more than 6%, Xunlei fell 4.9%, Square fell more than 4%, and Seven Star Cloud fell more than 4%.

Other factors driving the decline of digital currencies

Techcrunch reported that the news of EU regulation of digital currencies on Wednesday was also a driving force behind the decline of digital currencies that day.

Wall Street News Xiaocong APP News mentioned that Reuters reported on Wednesday that the Belgian think tank Bruegel said in a report prepared for the finance ministers of the 28 EU member states that a single standard should be established for digital currency rules. The EU needs "common rules" for digital currencies and how to distribute and trade tokens. The report emphasized that any regulations must apply to exchanges or other related companies.

The day before, lawmakers from the European Parliament met to discuss whether to regulate ICOs under crowdfunding regulations. According to previous reports, finance ministers from the 28 EU member states will discuss a series of challenges brought about by the growing popularity of digital assets and whether regulations should be tightened on September 7 and 8.

The Forexlive article believes that the news from Goldman Sachs was not the main reason for the sharp drop in digital currencies on Wednesday. According to the news, Goldman Sachs has not completely abandoned the plan to set up a trading room, and is currently working on digital asset custody services, which is the first step towards "big league" trading.

The article believes that the real bad news on Wednesday actually came from ShapeShift. The company announced that it would cancel anonymity and force users to register, which is undoubtedly to combat money laundering and other illegal activities. Therefore, the sell-off of digital currencies other than Bitcoin is more violent than Bitcoin, indicating that many people who do not want to be named and own small currencies are selling.