Goldman Sachs getting involved with cryptocurrency trading?

in #cryptocurrency5 years ago

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:

https://steemit.com/cryptocurrency/@jrcornel/usd500-million-dollar-crypto-hedge-fund-on-its-way

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.

Sources:

https://www.cnbc.com/2017/10/02/goldman-sachs-exploring-bitcoin-trading-operation-report-says.html

Image Sources:

https://news.bitcoin.com/goldman-sachs-covering-bitcoin/

https://futurism.com/goldman-sachs-analyst-predicts-bitcoin-price-could-hit-4800/

https://www.coindesk.com/4800-goldman-sachs-analyst-thinks-bitcoin-price-heading-higher/

Follow me: @jrcornel

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Funds and firms will always be attracted to volatility, it's needed to produce alpha. That 75 number will grow for sure. Looking forward to the continued influx of managed money coming in.

I would bet it doubles within the next 12 months. :)

Nice post ! Exponential growth in bitcoin leads to exponential involvement among institutions =)

That said, the price charts have been incredibly clean which was one of the big reasons I started buying bitcoin on breakouts years ago. As more sophisticated players enter the arena, the charts will become less coherent with entry points less obvious and diminished upside.

Still, the cryptospace is only worth about $150 billion which is a far cry from where it will eventually be within a few years.

(͡:B ͜ʖ ͡:B)

Thank You @jrcornel. Yes Cryptos are wonderful and I just wanted to UP Vote your post. I too am a Fellow Arizonan. I was a Stock Broker for 27 years and I am grateful to be out of the Wall Street animal. I used to trade stocks everyday for about 20 years. Because of Cryptos I have no need to go back to the stock trading game. I don't miss stocks at all.............STEEM On !!

That's fantastic! Our history sounds very similar! Where in AZ are you? (ish)

.. lol ... after it was called by another bank manager a fraud

Yeah many chiefs getting from IB into crypto. Not long ago it was Oliver Bussman (former CIO of UBS) who joined IOTA. There is no stopping crypto anymore mate...

Sure they will be in, there is the money, a lot. Now they will benefit as well. If you cant beat them ,... join them :-)

Yes, something like that for sure!

I really see Potential for cryptocurrencies taking over every market.

They are all trading Cryptos, or at least monitoring the markets waiting to jump in properly!

Whether they comment negative or positive the fact is that they are thinking about bitcoin and that is the greatest news of all. once they have started talking about bitcoin they will be positive regarding bitcoin in near future.

Nooooooo!

I need more time to build my crypto positions, before the big money comes in!!!

lol

Yup they trading their shit dollars for crypto

Goldman is in the process of patenting their own blockchain algorithm. While currently here in the USA, there are major restrictions to get involved in crypto exchanges.

I expect these barriers to magically "disappear" when Goldman Sachs gets in the game. Surprise!

Upvoted.

Trading bitcoin is an amazing idea. What is wrong with trading bitcoin?

I am not surprised at them wanting in officially as the crypto market cap increases. I think they are being quite forward thinking. It will be good for crypto as a whole with the added 'legitimacy' you are right though, they will certainly try to tweak the markets a little and with their experience they will manage it! :0)

It's going global crypto is the in thing now I pray it hits Nigeria big

This article gives credence to a video analysis I saw a few days ago of what a large part cryptocurrency will play worldwide in the not too distant future in controlling the transfer of value by means of blockchain technology. Very refreshing!

you have great posts and interesting thank you for shareit

These naysers hey want there hand in thos cookie jar too

let's help each other upvote, if with us will produce many things

upvote me then i will upvote you:)
goodluck (y)

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This is indeed great new to have a Bank with such stellar reputation on Wall street finally come to the party. My fear however is the fact that central banks around the world are gradually coming to accept the blockchain technology and are now issuing their own cryptocurrencies.
Dubai is likely to be the first nation to issue their own cryto; the emcoin, then we have the Japans with their J-coin. @jrcornel and @timcliff dont you think that Bitcoin and altcoins might loose their significance in the wake of the issuance of these state backed cryptocurrencies?? #discussion

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Positive noises from Goldman helps put a floor into the price points.

@jrcornel very interesting news
I am proud to see there are companies that participate in criptocoris trading
thank you for sharing and this is an important information news that helped everyone read.

Positive News that big firms are getting IN. Over a period of time, crypto currency can become more mainstream.

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