Investment banking giant, Goldman Sachs on Wednesday announced that it will launch a Bitcoin trading desk.
According to reports, the firm which is one of the major financial institutions in the United States is planning to use its own fund to support several investment contracts linked to Bitcoin and expects in time to trade in “physical Bitcoin” directly.
Rumors have been swirling since last December that the firm had been making plans to launch a cryptocurrency trading desk, but executive at the investment giant had rubbished such rumors as false. However, with the April 23rd hiring of cryptocurrency trader Justin Schmidt- the bank is now announcing that it had “not reached a conclusion on the scope of our digital asset offering.” Many analysts are reading the statement as the bank’s intent to get into the world of cryptos.
Goldman Sachs itself had earlier revealed that it will start providing its users a certain type of futures contract dubbed a non-deliverable forward that will be connected to Bitcoin. This is seen as a quick about-turn on the part of the bank that just last November referred to the cryptocurrency as a “vehicle to perpetuate fraud.”
A Goldman executive, Rana Yared who was there during the design of the Bitcoin trading desk noted that most of the people connected with the operation have their doubts of the cryptocurrency.
“I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world,” she said. “For almost every person involved, there has been personal skepticism brought to the table.”
On the other hand, the bank received sufficient interest from hedge funds, endowment and other institutional investors that led to its board of directors to agree to approve the move that will ensure that it becomes the first major US bank to use its own fund to invest in cryptocurrencies.
“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value,’” Yared said.
At the end, the bank expects to gain regulatory approval from the Federal Reserve and state-level authorities to begin the Bitcoin investments.
“It is not a new risk that we don’t understand,” Yared said of trading in Bitcoin. “It is just a heightened risk that we need to be extra aware of here.”