The blow to the value of the cryptocurrency came from a media report that Goldman Sachs may be abandoning its plan to trade with these virtual currencies.
Paul R. La Monica
Bitcoin investors are being hit digitally lately. Strong. Bitcoin prices have plummeted more than 20% in the last two days.
Ethereum, Litecoin, Ripple and other cryptocurrencies have suffered equally large falls. The reason for the last setback? A Business Insider report notes that investment banking giant Goldman Sachs may be abandoning plans to launch a cryptocurrency trading desk.
Goldman Sachs told CNNMoney that he had not yet made a firm decision on bitcoin or other cryptocurrencies.
"In response to customer interest in various digital products, we are exploring the best way to serve them in space." At this point, we have not reached a conclusion about the scope of our digital asset offering, "Goldman Sachs said in a statement. release.
Read: 5 points that Paul Krugman puts to debate on cryptocurrencies
But if Goldman Sachs goes back, that's not good news.
Naeem Aslam, chief market analyst at ThinkMarkets UK, which is optimistic about bitcoin, said in an email that "there is no doubt that bitcoin's price is supported by this exaggeration that institutional banks are going to get involved" .
First came stories about a possible entry of Goldman Sachs into bitcoin and other cryptocurrencies last December, shortly after the two large futures companies, CBOE and CME, established exchanges for bitcoin contracts.
Goldman Sachs confirmed in May that it was thinking of using its own money to start trading bitcoins, according to the New York Times.
Bitcoin prices, which hovered near a historical level of $ 20,000 in December, have lost more than two-thirds of their value since then and are currently trading at around $ 6,400.
Hussein Sayed, chief market strategist at exchange trader FXTM, said in a report on Thursday that prices may fall below $ 5,000.
Therefore, it might make sense for Goldman Sachs to adopt a more cautious approach in this extremely volatile market. Most bitcoin news has been negative lately.
Google, Facebook and Twitter have banned some cryptocurrency ads.
The Securities and Exchange Commission has blocked several proposals for bitcoin-traded funds in recent months, including the plans of the pro-shake ETFs ProShares and Direxion and one backed by the Winklevoss brothers, famous for Facebook.
Several listed companies have also tried to join the craze of cryptocurrency, which raises more concerns that bitcoin is a bubble. Overstock has downplayed much of its online retail business that is struggling to focus on cryptocurrencies.
Bioptix, a manufacturer of hormones for farm animals changed its name to Riot Blockchain. The stock rose, until the company revealed that the SEC was investigating it.
The Long Island Iced Tea beverage company was transformed into Long Blockchain. Since then, the Nasdaq has removed it from the list and is now marketed as a so-called stock quote bulletin at a price below 20 cents per share.
Some companies also started selling digital tokens through initial coin offers (ICO) to raise money.
Eastman Kodak, yes, the camera and film company, created his own KodakCoin. There is even PotCoin for the marijuana and legal cannabis industry.
Many of these initial coin offers are legitimate. But there have also been scams. The SEC even created a fake ICO that it named HoweyCoins to show how easy it is to cheat investors.
And several business titans have also criticized bitcoin.
JPMorgan Chase CEO Jamie Dimon has called Bitcoin a "fraud" that was only good for drug dealers and North Korea.
The billionaire investor Prince Saudi Alwaleed, whose Kingdom Holding Company owns stakes in Apple, Citigroup and Twitter, told CNBC late last year that he believed the bitcoin was an "Enron in process" that would implode.
Warren Buffett and Charlie Munger of Berkshire Hathaway have also warned investors to stay away from Bitcoin.
Buffett told CNBC in early May that bitcoin was "probably rat poison," while Munger said at the Berkshire shareholder meeting that the idea of owning cryptocurrencies was "just dementia."
It is also worth noting that the recent fall of bitcoin comes at a time when the Turkish lira, the Indian rupee and the Argentine peso are in free fall as the dollar strengthens.
Therefore, investors do not seem willing to bet on Bitcoin as a substitute for the fragile currencies of emerging markets.
Even so, the decline in Bitcoin occurs even at a time when more and more companies and organizations have adopted blockchain technology, the digital book that keeps records of transactions in virtual currencies.
IBM is a great defender of blockchain technology. The World Bank has announced plans to launch a blockchain link. There is even a company that wants to run a fantasy football league using blockchain. (Call me old-fashioned, but I'll stay with Yahoo for my league).
There is a clear difference between bitcoin and blockchain. The future of money can still be digital, but that does not mean that bitcoin or the scores of other virtual currencies will survive and prosper.