Wall Street has once dreamt big when it comes to cryptocurrencies, says Bloomberg. Now it allegedly does not. But what if I told you that Bloomberg wrote an article contradicting its own claim?
“Wall Street Quietly Shelves its Bitcoin Dreams” is an article which makes big assertions. Its opening is as blunt as its headline: “Limbo—that’s where to find Wall Street when it comes to cryptocurrencies.”
The article employs a typical layman’s tune of how the big companies are no longer excited about crypto. This is due to an obvious factor — BTC’s decrease of market value. None of the big companies have thrown in their towels, Bloomberg admits, but the craze is definitely not the same.
It begins by describing Goldman Sach’s crypto case. The company “sought to position itself at the cutting edge of digital assets that skeptics see mainly as a domain of day traders and anarchists.” However, the progress is so slow that it “is barely noticeable.” The author then quotes Daniel H. Gallancy, chief executive officer of New York-based SolidX Partners, who notes that the “market had unrealistic expectations that Goldman or any of its peers could suddenly start a Bitcoin trading business.”
The next stop is Morgan Stanley. Its problem, according to Bloomberg, is that it “has been technically prepared to offer swaps tracking Bitcoin futures since at least September, yet thus far has not traded a single contract, according to a person familiar with the matter.”
Citigroup Inc has failed to trade “any of the products designed for cryptocurrencies within existing regulatory structures.” Concurrently, Barclays Plc, once a crypto enthusiast, no longer has an appetite for a crypto trading desk as well.
And now read again
After reading the above you might feel that you have read something slightly familiarly sounding. Like FUD, for example. But here is the deal: the version is not a full one.
Going back to the GS case, the author does not simply stop by quoting Daniel H. Gallancy. After injecting a solid dose of negativity, he goes on to factually assuage it. Thus, he says that GS has invested in the U.S. crypto custody service BitGo and adds phrases like “It’s also offering derivatives on Bitcoin called non-deliverable forwards.” And “Still, Goldman plans to add a digital-assets specialist to its prime brokerage division, the person said.”
Now you might be wondering who is “the person?” That we do not know. In fact, the whole article is filled with appeals to cryptic human beings who are somehow familiar with all the details. In the case of Citigroup inc Bloomberg even deems appropriate to rely on the words of “a separate person with knowledge of its business.” Basically, a random person.
Let’s suppose however that that separate individual is in fact knowledgeable. In order to support the argument of a limbo/shelving dreams s/he simply said that Citigroup inc is experiencing complications. Nothing indicated in his/her words that the bank is discarding its crypto initiatives.
Similarly, when bringing up the Morgan Stanley’s crypto issue, Bloomberg first tries to depict a mild version of doom-and-gloom. But then humbly adds that “a person with knowledge of the business said in September the contracts would be launched once there is proven institutional client demand.”
In other paragraphs it even brings up the major positives that have happened this year. For example, that Yale has invested in a crypto fund and that Intercontinental Exchange has launched Bakkt was launched. For the uninitiated, the latter is not a minor partnership but an initiative the New York Stock Exchange’s parent company.
Where is the limbo?
This begs the question: where exactly are the announced limbo and shelved dreams? Or is there a different meaning to the word limbo other than “an uncertain situation that you cannot control and in which there is no progress or improvement”?
Undoubtedly, the enthusiasm of big companies is not as strong as when BTC was trading at $17-18,000. Thus, the sluggish approach.
It is also highly likely, as Bloomberg suggests, that some Wall Street players are put off by the lack of clear regulation. It is, after all, a common worry. Binance, for example, also yearns for a more coherent and clear approach. And it is up to the Security and Exchange Commission, which so far has solely declassified BTC and ETH as securities, to satisfy that demand. It is also up to its regulators to finally make a decision on the VanEck/Solidx ETF fund and hence further institutionalize BTC.
However, what Bloomberg described in the article barely corresponds to the categorical headline of Wall Street shelving crypto dreams and being stuck. If that was the case, then each of the negative statements would have ensued a detailed description of how a Wall Street company discarded/discontinued/rejected its crypto initiatives. Instead, the article continuously showed that the majority of financial sharks — Barclay’s PlC excluded — are in fact getting on board the crypto train despite BTC’s slump. Either by introducing new initiatives or simply waiting for more investors to open up their crypto hearts (and wallets).
That said, perhaps “Wall Street is Not Ready to Shelve its Bitcoin Dreams?” is a slightly more appropriate headline?