Goldman Sachs To Venture Into Bitcoin (BTC) Futures Through New Crypto Trading Desk
Goldman Sachs bank has announced that it plans to launch a Bitcoin (BTC) trading desk that will allow it to trade cryptocurrencies on behalf of behalf of its customers.
The announcement about the Bitcoin trading desk was made official on Wednesday following a report by the New York Times stating that the investment banking behemoth will use its own money to fund the project. There have been rumors that the bank has been planning to launch a cryptocurrency trading desk since December last year although its executives dismissed those rumors as false.
Talks about the company’s involvement in the cryptocurrency market resurfaced after it hired a cryptocurrency trader called Justin Schmidt although at the time it did not reveal much about its plans. However, it has now announced that it will provide its clients with futures contracts known as non-deliverable forwards which will be tied to bitcoin. It is an interesting move by Goldman Sachs’ especially considering that its CEO Lloyd Blankfein described Bitcoin as a means of facilitating fraud.
Despite the announcement about the Bitcoin trading desk, many people are still skeptical about Bitcoin and cryptocurrency in general according to Goldman Sachs executive Rana Yared. Nonetheless, Goldman Sachs’s institutional investors, endowments and hedge funds have expressed a lot of interest. The decision about the Bitcoin trading desk was thus pushed to a vote by the bank’s board of directors which approved the idea.
Goldman Sachs will now become the first bank in the U.S to fund its own initiative for cryptocurrency derivatives and cryptocurrency trading. The news about the bank’s decision to venture into the cryptocurrency space comes at around the same time that the cryptocurrency market has been recovering from a massive downward slump that took place in Q1 of 2018.
Goldman Sachs is also one of the major traditional banking institutions that have opened up to the idea of venturing into cryptocurrency. This trend suggests that the cryptocurrency market might finally be stabilizing, thus encouraging more traditional firms to jump on board. Additionally, the decision is fueled by the interest that investors have shown in taking advantage of the growth and opportunities in the cryptocurrency and blockchain space.
The bank still acknowledges that the cryptocurrency market is still very risky. Officials have therefore been employing extra precautionary measures throughout the development process to avoid being exposed to too much risk.