The rise of the digital currencies has done enough in order to sway the attention of institutional players. The latest report from suggests that as the regulatory air gets more clear, big players are waiting with loads of cash to pump into the crypto space and start trading digital currency in the next 3-12 months.
According to the latest report from , Wednesday, May 2nd, Wall Street giant Goldman Sachs will be using its own funds and sponsor a variety of investment contracts that are tied to the price of bitcoin, and over the period of time, the banking giant hopes to gradually start trading in the cryptocurrency. The first of Goldman Sachs starting a crypto-trading desk emerged last year in December 2017.
A team from Goldman Sachs is currently working on the regulatory aspects and approval in order to figure out all the additional risks that come along with digital currencies and other similar assets. Rana Yared – a Goldman executive, is in charge of this trading operation. Yared told that many of the Goldman employees still remain skeptical on their views about the cryptocurrency.
She said:
“I would not describe myself as a true believer who wakes up thinking bitcoin will take over the world. For almost every person involved, there has been personal skepticism brought to the table.”
However, the latest decision has arrived after a growing number of clients of Goldman Sachs like hedge funds, endowments, and other institutional investors expressed interest in holding bitcoin and its derivative assets. Yared noted:
“It resonates with us when a client says, ‘I want to hold bitcoin or bitcoin futures because I think it is an alternate store of value.’”
This decision of Goldman Sachs comes along with a lot of uncertainties, as the crypto space still remains highly unregulated and still, there are only a few measures being taken at the moment in curbing the market manipulation or extreme price volatility. After achieving its all-time high of $20000 during the mid-December 2017, bitcoin was seen on a steep downfall earlier this year correcting more than 70% from its peak, before finally recovering in the last month of April.
The fall in bitcoin and the overall cryptocurrency was due to the dark cloud of regulatory oversight as traders and investors started worrying about future steps the regulatory bodies could take in order to control at that time exploding crypto markets. Yared stated:
“It is not a new risk that we don’t understand. It is just a heightened risk that we need to be extra aware of here.”
Notably, Goldman Sachs is the first banking giant from the Wall Street to clear trades for its clients involved in buying or selling bitcoin futures through the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE). The publication notes that in addition to allowing its clients to hold digital currencies, the company “will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.”
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The Wall Street Journal reported Telegram has raised $1.7 billion in anticipation of an initial coin offering (ICO). However, the company has instead decided to scrap its much publicized ICO in favor of beefing up its popular messaging service and expanding into tokenization.
Also read: to Build Anew
Telegram Scraps ICO
Paul Vigna details how Telegram has “brought in so much money from a small group of private investors that it is calling off a planned sale of cryptocurrency to the wider investing public.” The company is effectively ditching its ICO after having raised a cool $1.7 billion.
It’s an interesting time for Telegram, to put it mildly. Recently, the encrypted messenger service celebrated gaining 200 million users. Almost immediately, the Russian government attempted to force it to provide user information, and a way to backdoor decrypt, in an effort to combat terrorism. Pavel Durov, Telegram’s charismatic founder, flatly refused, pulling lawyers from the determinative Moscow hearing. Soon after, the service was summarily banned throughout Russia.
An eventful few weeks for Telegram included colorful protests over Russia’s ban of the encrypted messaging service.
That, in turn, set off a wave of protests, including supporters in the country flying paper airplanes (the company’s logo) as a symbol of resistance. Even Mr. Durov openly engaged in the fight, using his personal channel to suggest ways to hack around the ban. If all that wasn’t enough, Telegram’s European services ghosted for most of the continent a few days ago, and sporadically throughout the rest of the world, causing major disruptions.
Perhaps then it’s no wonder Mr. Durov is looking not to explore the ICO realm further but will instead use that newly raised cash to beef up existing services.
Telegram Open Network
According to the Journal, the company is expanding into a “digital payments platform” to compete with the likes of bitcoin core. It will point a great deal of its new money in that direction, titling the effort the Telegram Open Network. “The network, which will be built using ‘blockchain’ ledger technology, ‘can become a Visa/Mastercard alternative for a new decentralized economy,’ the company noted in a 23-page description of its plans,” Mr Vigna described.
If these plans sound vaguely familiar, they should. In 2017, the company looked toward raising over a billion dollars in hopes of bringing-forth a token, “gram,” which would exist on a larger online platform. The company, again, has often pit its future against that of bitcoin core (BTC), suggesting the reason BTC hasn’t been widely adopted is the result of fundamentally chronic and crippling issues.
A first mover advantage Telegram might have is its near quarter of a billion user base, a built-in ready market for its services. And to Mr. Vigna, “Telegram reported in a February Securities and Exchange Commission filing that it raised $850 million from 81 investors in a private deal. In March, the company said it raised another $850 million from 94 investors in a second private deal. The offerings were open only to accredited investors, which meant participants needed to exceed income requirements or have net worth of at least $1 million.”
Speculation, besides the above, is that the growing noose around ICOs and their pumpers from regulatory bodies around the world caused Telegram to shift away. This would also make a huge amount of business sense, as typical regulations would expose the likes of Mr. Durov to many more bureaucratic eyes. A private fundraising is just that, private.
Do you think Telegram is making a smart move? Let us know in the comments below.
Images via Pixabay, Telegram.
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