Bitcoin futures trading just got a big boost. Goldman Sachs will become the first Wall Street bank to start trading in bitcoin futures. By having one of the most well-known investment banking and financial services providers in the world make this step is dispelling the belief some have that bitcoins are financially unstable and unsafe. This is bitcoin history making.
Goldman Sachs said this decision came after continuous inquiries from clients. According to Bitcoin Magazine, Goldman executive Rana Yared said a growing number of requests from their clients that indicated rising interest in holding bitcoin as an alternative asset.
“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,'” she told the New York Times.
The trading will actually start within the next few weeks. Goldman Sachs will use its own money to trade bitcoin futures. “Goldman is also set to ‘create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients,’” Coindesk reported.
Another reason the banking giant decided to go forward with trading bitcoin futures it that this will enable “Goldman to trade on the underlying bitcoin cryptocurrency, without being directly exposed to it. Goldman will not (yet) come directly into contact with the Bitcoin blockchain,” Bitcoin Magazine reported.
To handle the bitcoin trading, Goldman Sachs has hired its first “digital asset” trader, Justin Schmidt. Schmidt, who was a trader at hedge fund Seven Eight Capital before leaving that company in 2017 to trade cryptocurrencies, will handle the daily operation. Schmidt. And, according to the New York Times, Schmidt is also weighing trading bitcoin itself that is if Goldman can secure regulatory approval.
There are still many risks associated with holding cryptocurrency. And many of Goldman’s competitors remain unconvinced about bitcoins, dismissing bitcoin a “bubble” and even “fraud.” JP Morgan CEO, Jamie Dimon, for one called bitcoin a “terrible store of value.”
Bitcoin was created in 2009 by an anonymous founder or group of people, known only as Satoshi Nakamoto. At the time bitcoin was proclaimed as a replacement for Wall Street banks. In the past decade the demand for the cryptocurrency has only increased. In fact, over the last 12 months, bitcoin gained 515% and surpassed the $1,000 mark for the first time in 2013, breaking the $2,000 threshold in May 2017. “A bitcoin frenzy drove a spike in demand for the cryptocurrency in late 2017, when BTC neared $20,000—a new all-time high,” Investopedia reported.
Hey Jamie Dimon,
Still think people who buy Bitcoin are “stupid”?
Maybe you can explain this on your next earnings call. https://t.co/HE0UbaqMTR
— ฿ully esq. (@CryptoBully) May 2, 2018
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