Coinbase has reported that the price of Bitcoin fell by 5% as a result of Goldman Sachs’ decision to delay plans to open a cryptocurrency trading desk.

Brian Kelly of BKCM, a crypto hedge fund, stated that the Goldman Sachs report is behind the bearish sentiment towards Bitcoin. “They were not a part of the ecosystem yet, but to the extent that they represent the institutional herd, this is a negative,” he commented.

Goldman Sachs had been working on the cryptocurrency trading desk for a number of months, but because it still perceives an ambiguous regulatory atmosphere in the US and its developers say there are many steps yet to be taken to crystalise the project, the firm has decided to put its plans on hold.

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

Other crypto projects

However, Goldman Sachs is still focused on other crypto-related projects such as a custody product for cryptocurrencies. According to Business Insider, this “would mean that the bank holds cryptocurrency and, potentially, keeps track of price changes, on behalf of large fund clients.”

Experts say reputable custody offerings to safeguard holdings need to be in place before major banking firms decide to get in on the crypto action.

For now, Goldman Sachs will continue to make markets for clients in Bitcoin futures and contracts for difference, which allow investors to bet on the price of Bitcoin without actually purchasing the crypto.