Goldman Sachs getting involved with cryptocurrency trading?
The JPMorgan CEO wants to fire employees looking to trade Bitcoin, Goldman Sachs may be wanting to hire them.
In news out this morning, it was stated that Goldman Sachs has been investigating getting involved with, and possibly trading, cryptocurrencies due to client demand.
The quote from the company was as follows:
"In response to client interest in digital currencies, we are exploring how best to serve them in this space."
How is Goldman looking to get involved?
Whether that means Goldman is interested in trading options (when they come out later this year), or possibly futures contracts, or the underlying assets, it wasn't made abundantly clear in the news release.
Hopefully this means they will take part in trading of the actual asset itself. However, any direction or form that they decide to get involved would likely be welcomed whether it added more buying pressure to the assets themselves or just added more liquidity to the entire space.
Either one would be a positive for the industry.
Also, adding more participants to the space along with the assumed legitimacy that attaching a name like Goldman might bring are other potential positives.
Is this all that surprising?
On one hand it is extremely surprising when this comes just days after other prominent Wall Street Banks are calling Bitcoin "a fraud" and saying how "traders would be fired for trading Bitcoin" and "it's a pyramid scheme" etc.
However, on the other hand Goldman was the only one of the major Wall Street banks to issue a trading report a few months back on Bitcoin's price action.
Several banks have issued reports on blockchain technology, but Goldman was the only one to issue a report on its price action.
Taking that into account, it is pretty clear that Goldman already looks at Bitcoin and cryptocurrency trading a little more positively than some of the others.
Institutional money is starting to get involved.
As I wrote about the other day, hedge funds and institutions are starting to enter the space:
According to financial research firm Autonomous Next, there are now approximately 75 private funds and hedge funds in the space.
Whereas there were only a handful a couple years ago.
Why is Goldman looking into this?
For several reasons.
Goldman's bond trading division is struggling to generate significant returns and was down 40% in the second quarter of this year.
Trading a volatile asset like Bitcoin and cryptocurrency might be just what the doctor ordered to boost revenue.
The former vice president at Goldman, Matthew Goetz, would agree:
"The smartest Wall Street firms have an amazing opportunity to lead the market in offering financial services to the burgeoning cryptocurrency industry."
"I think it behooves the smart and more forward-thinking firms to be involved in cryptocurrency, especially given the number of new services and business lines that will stem from it as this important new industry continues to build and institutionalize."
By the way, that former vice president from Goldman now works as the managing partner and CEO at BlockTower Capital, a cryptocurrency investment firm.
Go figure. :)
This is great news in my opinion. Looking forward to more big time firms getting involved in the space. Even if they might be able to manipulate prices slightly to their advantage.
The more the merrier!
Stay informed my friends.
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