Up until now, big banks have shied away from bitcoin as well as other cryptocurrencies, perhaps being put off by their volatility and scandals surrounding them. However, it seems this trend is about to end as Goldman Sachs, a true investment banking giant, is moving ahead with plans to launch the first ever bitcoin trading operation in the history of Wall Street.
According to the reports, the official launch date is yet to be confirmed but should begin within a couple of weeks and will be led by the firm‘s first ever digital assets trader Justin Schmidt. The bank will only offer limited number of bitcoin derivatives at first as it plans to trade bitcoin futures using its own money on its clients‘ behalf. The next step will be creating a more flexible version of the future, which will be offered to Goldman‘s clients.
Nonetheless, this is a huge landmark for bitcoin and other cryptocurrencies as recognition from such a major player in the financial industry gives huge legitimacy not only to bitcoin but crypto industry overall. Only a few years ago, the suggestion that such an institution as Goldman Sachs even considered trading bitcoin would have sounded ridiculous.
The tables have turned, however, as more and more hedge funds, investment banks and other institutional investors have shown an increased interest in cryptocurrencies. While Goldman will not be directly buying and selling actual bitcoins, its team is said to be definitely considering that option further down the road, given the regulatory framework for the crypto market is introduced.
Commenting on the decision Goldman Sachs executive Rana Yared expressed a cautious approach, saying that, “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. <…> 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.“
Goldman Sachs has already been more involved with crypto than the majority of other banks as it is clearing trades for customers who buy an sell bitcoin futures on Chicago Mercantile Exchange and the Chicago Board Options Exchange.
Speaking to The Independent, Matthew Newton, analyst at trading platform eToro, said we could expect more similar announcements in the future, as, “Despite some initial posturing, the reality is most big banks have already invested significant amounts in research and development into blockchain technology, and cryptocurrencies themselves. It will still take time for institutional investors to fully come around – and the fact that Goldman won’t be buying or selling actual coins suggest some scepticism remains – but there’s a growing acceptance that these assets are here to stay.”
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