Cryptocurrencies crashed Wednesday after a report claimed that Goldman Sachs Group Inc. has abandoned plans to establish a bitcoin trading desk.

The plan, first announced by Goldman Sachs in May, would have seen the bank using its own money to trade with clients in a variety of contracts linked to the price of bitcoin.

The assets supported by the desk were unclear, but it was presumed that it would offer institutional support for hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc.

Business Insider broke the news, quoting an insider who said that the bank had abandoned its plans because of concerns about the regulatory environment. Executives are said to have concluded that many steps still need to be taken, most of them outside the bank’s control, before a regulated bank would be allowed to trade cryptocurrencies.

Officially Goldman Sachs has neither confirmed nor denied the report. A spokesperson told Reuters that “at this point, we have not reached a conclusion on the scope of our digital asset offering.”

A considerable number of people holding bitcoin were betting that Goldman Sachs would launch a bitcoin desk and thus spark more demand for bitcoin and other cryptocurrencies from institutional investors, raising prices.

Now, some of those speculators are cashing out, and the impact is significant. Bitcoin was trading at $6402.69 as of 9:45 p.m. EDT, down from $7,378.78 before the report was published. Ethereum dropped from $283 to $224.72, Bitcoin Cash from $628 to $508.15, and Litecoin from $68 to $56.26.

Bitcoin and cryptocurrency prices have long resembled a roller-coaster ride, but the current downturn has wiped out all price gains obtained over the last month and may indicate the onset of a new bear run.

Image: Pixabay