Goldman Sachs, one of the most important investment banks in the world, could eventually start to offer Bitcoin trading for its clients. The Board of Directors of the bank have signed off on the initiative and could be ready to set up a Bitcoin futures market in the future.
Goldman Sachs Bitcoin Futures
The Investment bank will be trading bitcoin futures with its funds on behalf of customers. But until now, there are no intentions of becoming a full licensed virtual currency exchange. The intention is to trade with its own money in a variety of contracts that are linked to the price of the famous virtual currency.
As reported by The New York Times, Goldman Sachs would be the first Wall Street bank to start bitcoin trading operations. Goldman Sachs will not be trading bitcoins, but instead, a group of professionals will be working so as to get the regulatory approval. The main problem behind working with bitcoins is the risk associated with holding the currency, which is very volatile.
Rana Yared, Goldman Sachs executive, said:
“I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world. For almost every person involved, there has been personal scepticism brought to the table.”
Nowadays, the perception that bitcoin is primarily known as a way to buy drugs online has almost disappeared. But institutional investors are still reluctant to invest in Bitcoin because there are not correct regulations placed.
According to Ms. Yared, Goldman Sachs concluded that Bitcoin is not a fraud and does not have the main characteristics of a currency. But there are some investors that are attracted by the fact that there are just 21 million Bitcoins available and that there will never be more. Its price could increase as demands grows with a fixed supply.
It is worth to mention that bitcoin futures would be the first step before investing directly in cryptocurrencies. Bitcoin and other digital assets pose several risks to these financial institutions. It is not clear neither, whether the futures market that Goldman Sachs may open in the near future would attract more investors than the already established CME and CBOE (both breaking records).
Hedge Funds and Crypto Exchanges Are Money Making Machines
But during the first quarter of the year, cryptocurrency exchanges and crypto hedge funds, have seen good numbers. For example, there are exchanges that are registering $3 million dollars per day. Binance was making more than $40 million fees a month, even after reducing its fees 50% some months ago. Huobi, another important exchange, has managed to earn $54 million dollars a month with lower trading volume than Binance.
Some Crypto Hedge Funds have also registered good profits during the first quarter of the year. Instead of losing with the downtrend that virtual currencies suffered, they were able to trade and make profits.
Not even some banks were able to register the profits that virtual currency exchanges had during the first part of the year. And this could be game-changing.
With the increased interest for cryptocurrencies and bitcoin, and an industry that is very profitable, what Goldman Sachs is doing could be very profitable. The interest for bitcoin is growing again, and mainstream financial institutions could be trying to find their place in the cryptocurrency world.