Financial firms on Wall Street and Main Street have embraced Bitcoin, now it is collapsing

Goldman Sachs returned to the emerging cryptocurrency market earlier this year when it relaunched its bitcoin trading desk after a short hiatus.

Earlier this month, the Wall Street bank began offering an investment service that allows its high net worth clients to profit from rising bitcoin prices without having to own the digital currency.

“This is a great time to be in space,” John Chow, executive of cryptocurrency trading firm Cumberland DRW, which is working with Goldman on its new bitcoin investment effort, told Bloomberg.

Crypto for people

Other major financial players catering to less profitable customers have also jumped on the bandwagon as cryptocurrency prices have soared. A recent PayPal promotion offered $ 25 to the first 48,000 customers who bought at least $ 25 in bitcoin using the payment company’s app.

And Venmo, owned by PayPal, last month began allowing users to buy and sell Bitcoin and other cryptocurrencies in increments of as little as $ 1.

Robinhood, the popular trading app aimed at younger investors, said its digital currency offering had 9.5 million users in the first quarter of 2021, up from 1.5 million at the end of last year.

As with stocks, Robinhood allows users to buy Bitcoin and other cryptocurrencies without fees, including dogecoin, the digital currency originally launched as a joke, which is among the riskiest digital currencies. Robinhood’s website says, “Cryptocurrency trading carries significant risk.”

Recent trends

The timing couldn’t have been worse. Over the past month, bitcoin and other cryptocurrencies have plummeted. This week, the price of bitcoin fell as low as $ 30,000. Although it has rebounded to $ 40,000, Bitcoin’s value remains more than a third below its all-time high of $ 63,000 recorded in April.

The collapse reduced bitcoin’s total value by around $ 450 billion, according to, while Ethereum and other cryptocurrencies also collapsed. The sudden decline is undermining why even average investors should take risks on cryptocurrencies.

Some, on the other hand, take advantage of the momentary decline to invest more in cryptocurrencies, using reliable platforms such as bitcoin pro. It is important to read the bitcoin pro reviews and all the necessary information before investing.

Crypto does not replace the dollar

One of the main arguments put forward by bitcoin advocates is that digital currencies represent a cheaper and more efficient way of doing business. The problem: Only a very small number of people use bitcoin to buy goods and services.

In 2016, the average number of purchases made with bitcoin exceeded 200,000 per day for the first time. Five years later, that figure is only slightly higher. There have been an average of 270,000 bitcoin transactions per day in the past month, according to, and this likely includes many transactions where one bitcoin investor is trading bitcoin for another.

It’s hard to tell how this compares to the number of dollar transactions per day. However, there are nearly 110 million credit card transactions in the United States alone per day. This suggests that the number of bitcoin transactions amounts to a small fraction of overall consumer spending.

At first, Bitcoin proponents used to say that transactions would increase as more businesses began accepting cryptocurrencies for payment. And today, a growing number of retailers accept bitcoin – Square, Venmo, and Paypal all support bitcoin as a payment method, while Mastercard said it will soon allow crypto payments.

Crypto is not truly global

Another common refrain from bitcoin bulls: cryptocurrencies are a global financial asset. This, in theory, should make it easier and cheaper to negotiate business with anyone in the world.

In reality, the cryptocurrency market has encountered the same problems as other currencies, namely that different countries have different rules governing permitted transactions. This week, China banned domestic banks and other financial institutions from supporting bitcoin. This means they are not allowed to process payments made in cryptocurrency or allow bank customers to hold bitcoins in their accounts. Chinese banks are also prohibited from converting bitcoin into yuan or any other currency.

Elsewhere, banks are also prohibited from trading Bitcoin throughout much of the Middle East. In the United States, regulators appear to be leaning towards more active monitoring of cryptocurrencies. On Thursday, the Treasury Department said it will require companies to report any bitcoin payments over $ 10,000, citing an effort to crack down on tax evasion.

Gary Gensler, the new president of the Securities and Exchange Commission, recently told CNBC that while he understands why people want to invest in bitcoin, the cryptocurrency market needs to be better regulated before that can happen more broadly. “I think we need more investor protection there,” he said.