Goldman Sachs To Open Bitcoin Trading Operation

in bitcoin •  21 days ago

Goldman Sachs announced yesterday that they would be opening a bitcoin trading operation.

This is a 180 degree turn from where they were just a few months back saying that bitcoin and cryptocurrencies were too risky for them to invest in.

Then a few months later they started making trades on the behalf of clients via futures products.

Now, it looks like they will be buying and selling bitcoin with their own money.

The release can be seen here:

https://www.nytimes.com/2018/05/02/technology/bitcoin-goldman-sachs.html

Some specifics:

It was not clear when they would officially launch, but they did say that they were only going to be trading futures products initially.

They are also in talks to create their own bitcoin derivative called a non-deliverable forward contract which will be offered to their clients.

Before you get too upset though, they are also wanting to trade the underlying bitcoin as well.

Goldman said they have submitted requests to regulators and are currently waiting for their approval before they can invest in the underlying coin/coins.

What this means:

Overall, this is huge news.

It gives a ton of legitimacy to the space.

Goldman is often seen as the mecca of finance and them being one of the first Wall Street firms to get involved in cryptocurrency trading likely opens the doors for the rest.

Upon hearing this news, Dan Morehead of Pantera Capital had this to say:

"Goldman Sachs to Open a Bitcoin Trading Operation. Within just a few months all of Wall Street will be trading bitcoin."

(Source: https://twitter.com/dan_pantera/status/991828690311901186)

All of Wall Street within a few months?

Sounds pretty good to me.

This may be the first time in history that an asset class as big as cryptocurrencies isn't really owned by institutions.

For once, retail was in first.

Dan Morehead said it best:

"Blockchain is the first half a trillion dollar asset class that nobody owns."

(Source: https://twitter.com/dan_pantera/status/991828690311901186)

When he says "nobody" he means institutions.

If that is indeed the case, I wonder where we are on this curve:

(Source: https://cryptocurrencyhub.io/bitcoin-price-will-go-to-zero-as-bitcoin-will-struggle-to-remain-the-dominant-cryptocurrency-ec36eafaac6b)

Goldman getting on board likely ushers more of the like into the space. The latter half of this year could get crazy again folks.

Stay informed my friends.

Follow me: @jrcornel

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What’s crazy is this I was telling people about this months ago. I happen to have caught wind of the 440k bitcoin purchase they made at $5600 a unit.

They literally have the power to control the market as they see fit. If you thought you seen manipulation before. Wait until you see what comes next.

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As long as they manipulate it up, that is fine with me. :)

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There is no point manipulating up. I’d they manipulate the price it will be in both directions!

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That won’t always be the case. Say then need to fill a order at a certain prices. They have the power to crash down and hold until they get what they want.

Could cause for more headache

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They are going to manipulate both ways. They're used to taking out stop-losses left and right.

Also, if decentralized exchanges ever get enough volume, they'll be able to front run them a la "Flash Boys"

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They can only meaningfully manipulate the futures market at the moment.

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Have you seen how people react to it.

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That's the market not manipulation. Listen to @karamyog 's last comment seconding my point.

"They can't manipulate cryptos, one has to account for these investments and report them as per SEC guidelines. All they can do it invest in a crypto hedge fund that plays in crypto markets. Money moving in and out has to be accounted for at banks and evidence has to checked by auditors. No banks are investing in crypto so far, only futures, if at all. And after volcker rule, trading using proprietary capital is very difficult for banks."

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The futures market is directly correlated to the btc market. If you crash the futures you can then short btc until the prices equal out. And if you buy a whole bunch of futures you'll pump the btc market.

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But they are not correlated. The futures market would have to be many magnitudes larger if one wanted to shock the btc market but even then this would not be direct manipulation. It would be the market opinion responding.

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They can't manipulate cryptos, one has to account for these investments and report them as per SEC guidelines. All they can do it invest in a crypto hedge fund that plays in crypto markets. Money moving in and out has to be accounted for at banks and evidence has to checked by auditors. No banks are investing in crypto so far, only futures, if at all. And after volcker rule, trading using proprietary capital is very difficult for banks.

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Man o Man are you going to be in for one hell of a surprise very soon.

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Ok, i will wait for the surprise and more conspiracy theory.

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Ever thought that you have been conditioned to believe small groups and not think out Maude the box. Trust you will be surprised.

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They can't manipulate precious metals either right?

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They may be manipulating every single market that is relatively illiquid compared to stocks and rates. And they may have taken exposure to bitcoin, although i highly doubt it, but probably only via futures, not actual bitcoins. They have to justify exposure to bitcoin futures to shareholders and regulators. And they have to justify exposure to actual bitcoins. In the absence of regulation, goldman buying 440k bitcoin at 5600 is plain fart and therefore no case of any market manipulation through it. There are plenty of other institutions that can manipulate bitcoin market, not goldman as things stand currently. If the US regulators wont drag them to court or fine them, shareholders will sue them or european regulators will fine them. They are not buying any bitcoin without it being regulated. There is no way to account for that purchase. Its not a fixed asset, its not an intangible asset, it has to be on their balance sheet somewhere. Goldman is a regulated listed financial entity mate!

I suppose Goldman was bound to enter the space officially at some point. If there's money to be made, the men doing "God's work" were bound to show up.

"...were too risky for them to invest in."

Goldman was probably loading up the bags at that point. :-)

toon.jpg

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That's funny, and probably pretty accurate.

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Always ask: Cui bono? ... ;)

BTC is going mainstream baby! Hopefully it will drag STEEM along to new heights 👍💰👍

Remember the famous quote of warren- " Derivatives is the financial mass destruction"

i don't trust this Goldman Empire shit, all they do is for their own interest to make money and not for the Bitcoin promising future.

I posted about this as well, I agree it is big news with the potential to bring in a new sector of investors.

This is great news! This should spark more banks to follow and ultimately a big step for cryptos. Hodling with require much patience, but those who wait will be rewarded.

Great update, I love that quote. Once Goldman gets in all of Wall Street will join in for FOMO. In investor calls, analysts will be asking banks and hedge funds why AREN'T you trading bitcoin and bitcoin contracts/futures. As far as the graph is concerned. I think we're at the lower end right above the bear trap that we just came out of. We are nowhere near "the paradigm" of everyone and their grandma buying crypto with their 401k and IRAs. Bitcoin still has a long way to blow up. #bullish

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That seems like a possible spot on the graph for sure. If that is the case, the next rally will make the rally to $20k look like child's play.

They have finally decided to stop being stupid and backwards and joined the 2nd internet revolution of the 21st century, this could be the start of something really big.

Regarding the graphic, at this point, i don't even know, some will say we are past the mania phase, other say we are past capitulation and returning to the mean, but since crypto currency adoption is still so small, i believe we are still in the awareness phase.

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Agreed. Just looking at the graph everyone wants to say we already had the peak of the cycle. Though it may have been something more akin to the "bear trap" sell off listed just before the big run up. If that is the case, the next run would be gigantic.

They probably looked at the balance sheet of binance.

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Ha, amazing what a little profits will do.

Since they will have a relationship with Poloniex (sister companies) they could really leverage that concept and business partnership.

This doesn’t just add legitimacy but liquidity and will help push the price up, reducing volatility!

I'd forgive their past discrepancy for this good news.
Expect the values of coins to go even higher in the next,t few days.

Really a Huge news! It has some great weight for crypto enthusiasts. Hope they will launch indeed.

I think a lot of institutions DO own a lot of bitcoin.

If you think back to 2017, something weird happened in March when bitcoin was at the $1000 mark. China had just closed down their exchanges (so a real ban for once) and everytime the price dipped it went back up and then started to power up. I think it was institutional investors fueling the ride up.

An Honor Can read your post @jrcornel Goldman Sachs a very unusual thing To Open Bitcoin Trading Operations
I See The tremendous change in Global marketing that is now a Reference for All Invertor to share it with me in terms of the risks in Bitcoin and cryptoccurency. This is confusing if this becomes a view in the world of Cryptoccurency, This is the right Watu for everyone to create a change and prepare the power to be able to compete here to be a winner maybe a few months earlier something that happened in the global market down drastically but that does not mean it's a big problem
Preparation continues to be a reference for a change in the world of coins or Criptoccurency and we will be the Winner later in the global marketplace.

Thank you @jrcornel for having a very useful view for us in Indonesia



See you on The Top

If they really going to do that. It will create huge buzz for the BTC and all the ALTc.
They have to accept it, today or tommorow. If they don't, other will. So, it will be best move by them.

Look at the prices right now and see what a big influence such news have on the market. These kind of institutions are not dumb, knowing when to invest if they haven't already and just came with the announcement to take the prices higher.
Why they haven't made such decision in December when BTC was close to 20,000?
They don't buy on feelings like most of us do. No wonder why they're called the smart money...

In the next few weeks — the exact start date has not been set — Goldman will begin using its own money to trade Bitcoin futures contracts on behalf of clients. It will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.

This is highly valuable information. Definitely need to stay updated on when they first plan on trading cause that is going to be a huge boost in price. Thank you for the information, and good writing!

Goldman’s sophistication was a big part of the reason he was open to the job, despite many other opportunities in the virtual currency world.

It is a great news! Many people will benefit from it. I am sure they will start STEEM too sooner or later! :)

Humans accept change but slowly same is the case here. I hope its benifitial for crypto.

I think that the fact that they're going back on their words really is also an endorsement for bitcoin, a whole lot country and their negativity toward cryptocurrency is really not good, I guess this goes ahead in really supporting the viability of bitcoin

I think this is really great informative news..I appreciate this post...

It's a bout time they will do it

The Financial Institutions are finally saying if you can't beat them, join them!!! Great Blog, Followed/Upvoted!

Interesting... the good news is G.S. is interested, and the bad news is G.S. is interested. I don't like to be associated with scum.

Woow woow woow!
The future is bright for cryptocurrency. Investment trusth is becoming solid as profit is high
I look forward for the day crytocurency would be trade in international trade as a meduim of exchange
Thank God am part if this movement.

That would be great, This will take crypto and bitcoin to a whole new level.
May and June always play a vital role in Crypto Growth, we have started listening good news. congratulations.

I think that really is a good many countries for Bitcoin and their negativity toward cryptocurrency is not really good, I guess it really goes forward to support the functionality of Bitcoin
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They probably looked at the balance sheet of binance.@jrcornel

great news!
now Bitcoin will touch the moon again.
i can witness that!

This is good news for sure. This further establishes that there is immense institutional interest out there and it is forcing goldman sachs to start this desk. Even more important, goldman is pushing regulators to get crypto regulation in place.

I think this may lead lead to sequential classification of crytos as securities. Given the amount of debate as to whether ethereum and icos are securitiea or not, bitcoin may be the first to get regulatory clearance and see massive institutional flow.

Lastly, banks will not be able to buy or sell bitcoin till they have regulations, which is why they are forced to launch derivatives. In order to provide liquidity and make markets, banks need bitcoin inventory and also need to classify bitcoin in some risk asset bracket and hold capital against it. Unless they know what to do with it and how to account for bitcoin on their balance sheets, they will not start providing liquidity in bitcoin. I talk more in my article -

https://steemit.com/bitcoin/@karamyog/can-banks-enter-crypto-space-barclays-ceo-pushes-back-what-should-you-believe

Goldman's move will usher more banks and with time, we will see a massive derivative desk on crypto assets. For banks, one door will close but another door will open, both due to cryptocurrencies.

could be a good thing and bad things, ,mix
good for if you already in vested, and you money in there, they would pump it
but it could also be a direction of Centralization of Crypto, from the crypto to fiat aspects, would see financial control this way, unless we all get rid of our fiat and go 100% crypto for peer to peer. good article though, glad you follow crypto as well, i will do avideo on this later in a few months, stay tuned

I have heard that starting around May 14, 2018 there will be a WALL of institutional money hitting the crypto space. Get in and HODL!!

Big banks create fear then by when the price is low. Also they invest very quietly when everyone else is walking away. That's how the banks get rich and the poor stay poor.

Excellent, the first thing we need to know is that you can not stop things like Bitcoin. It will be everywhere and the world will have to readjust itself. Bitcoin will do to the banks what the email did to the postal industry. We have decided to put our money and our faith in a mathematical structure that is free from human or political mistakes.

A debt of gratitude is in order for sharing significant post.

I take after your Every post.That would be incredible, This will take crypto and bitcoin to an unheard of level.

May and June dependably assume an indispensable part in Crypto Growth, we have begun listening great news.All the best Sir.

Flashback: Lloyd Blankfein had a level of discomfort with Bitcoin in November 2017 but, "Not willing to poo poo it!" Ha ha!

Always watch what they do, not what they say. The same applies to Bank of America, Fidelity, and a slew of other institutions talking down on cryptos while moving into the space. It's nasdaq '95 all over again.

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