Wall Street and Main Street financial firms embraced bitcoin. Now it's crashing.

Goldman Sachs piled back into 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 a rise in bitcoin prices without having to own the digital currency.

"It's a great time to be in the space," John Chow, an executive at cryptocurrency trading firm Cumberland DRW, which is working with Goldman on its new bitcoin investment effort, told Bloomberg. Goldman is hardly alone. Fidelity recently filed for regulatory approval to launch a bitcoin fund that the mutual fund and 401(k) giant says is aimed at wealthier individual and institutional clients.