Goldman ‘Building’ a Cryptocurrency Trading Desk
Wall Street’s biggest firms are growing more comfortable with cryptocurrencies.
Goldman Sachs Group Inc. (NYSE:GS) is setting up a trading desk to make markets in digital currencies such as Bitcoin.
Bitcoin is currently trading at: 12,383.8301, -1,437.58, -10.40%, as of 2:03p GMT, the market is open.
|Friday, 22 December’s Range||12,383.83 – 14,634.995|
|52 Wk Trading Range||752.8023 – 20,000.0000|
The bank aims to get the business running by the end of June 2018 as it is trying to work out security issues as well as how it would hold, or custody, the assets.
The move positions Goldman Sachs to become the 1st large Wall Street firm to make markets in cryptocurrencies, whose wild price swings and surging values have captured the public’s imagination and triggered keen interest from established financial and business institutions.
The bank is among a few mainstream firms clearing a new breed of Bitcoin futures offered by Cboe Global Markets Inc. (NASDAQ:CBOE), and CME Group Inc.(NASDAQ:CME).
Citigroup Inc. and Bank of America Corp. are taking a wait-and-see approach. And JP Morgan’s (NYSE:JPM) boss, Jamie Dimon is on record calling Bitcoin a ‘fraud’.
Goldman Sachs is now assembling a team in New York. While the bank has not made a decision where to house the desk, one possibility is that it will operate within the fixed-income, currencies and commodities unit’s systematic trading function, which conducts transactions electronically.
Darren Cohen, in the firm’s principal strategic investments group, is also looking at opportunities, another person said.
Goldman’s CEO, Lloyd Blankfein has been circumspect.
In October, he Tweeted that his firm was looking at how to deal with Bitcoin. In a TV interview last month, he said his bank did not need a Bitcoin strategy yet because the digital currency is still just developing and volatile.
That has changed, and changed quickly.
And when the bank began clearing futures earlier this month, it demanded that some clients set aside funds equal to the full value of their trade, aka 100% margin. The conservatism deterred some customers and led them to take their business elsewhere.
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