Goldman Plans to Trade Bitcoin; Price Nears 2-month High
Goldman Sachs plans to set up what appears to be the first bitcoin trading operation at a Wall Street bank.
The move will likely lend legitimacy to cryptocurrencies. And the bank is about to start using its own money to trade with clients in various contracts connected to the price of bitcoin.
Further, Goldman will not initially be buying and selling actual bitcoins. However, a team at the bank is looking at going in that direction if it can get regulatory approval. It will also find a solution on how to deal with the additional risks associated with holding the cryptocurrency.
Moreover, Goldman Executive Rana Yared admitted she wasn’t completely sold on cryptocurrencies. In addition, she will oversee the whole operation.
“I would not describe myself as a true believer who wakes up thinking bitcoin will take over the world,” Yared told the New York Times.
“For almost every person involved, there has been personal skepticism brought to the table.”
Goldman CEO Lloyd Blankfein has a similar sentiment. He said in a November interview with CNBC that “maybe bitcoin is a kind of bubble.” He added that he is not comfortable with it.
Even so, the move that Goldman, a frequent target for criticism, would even consider trading bitcoin would have been viewed absurd a few years ago. This was when the digital currency was mainly known as a way to buy drugs online.
On the other hand, proponents of bitcoin have addressed the news as a success for the growth of cryptocurrencies.
“I think it’s a fantastic sign for the industry,” said Michael Moro, chief executive of Genesis Global Trading.
“There’s been some level of sentiment amongst institutional investors that the asset class isn’t legitimate until the big banks get involved,” he said. “And while they’re still not trading the underlying, Goldman getting involved in the forwards is an important first step.”
Goldman news sends bitcoin price soaring
The news sent cryptocurrencies soaring, with bitcoin at almost $10,000, a level not seen since March 8.
Bitcoin is trading at $9,710.20, rising 0.54% at 6 am EDT. In addition, it hit a high of $9,779 overnight.
“While the presence of a major Wall Street bank is considered an announcement for the institutional adoption of digital assets, the wise remain wary,” Anton Marchenko, managing editor at Waves, told Express.co.uk.
“Goldman Sachs’ timing is perfectly correlated to bitcoin’s retracement and support lines of $8,700.”
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