Technology

Planning Said To Be Underway For A Bitcoin Trading Desk At Goldman

It seems like everyone is getting into bitcoin, and we’re not just talking about small unknown companies that are changing their names and everything they do just to get a piece of the action. Now in what would be another step toward legitimizing cryptocurrencies, a major investment bank wants in. We’re hearing that there could soon be a bitcoin trading desk at Goldman Sachs.

bitcoin trading desk at goldman sachs
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A bitcoin trading desk at Goldman Sachs?

Citing sources familiar with the plan, Bloomberg reports that Goldman Sachs is in the process of setting up its own trading desk specifically for bitcoin and other digital currencies. Goldman’s bitcoin trading desk could be up and running by the end of June, if not before, two of the network’s sources said. A third said the investment bank is working on ironing out potential security problems and figuring out the best way to hold the digital assets.

If there really is a plan for a bitcoin trading desk at Goldman, then it would make the firm the first major Wall Street name to build a market in cryptocurrencies. The values of bitcoin and other digital currencies have skyrocketed this year, rising so high so fast that traditional investment banks have hesitated to move into the markets.

However, legitimacy for cryptocurrencies began to arrive this year with the offering of bitcoin futures from Cboe Global Markets and CME Group. According to Bloomberg, Goldman Sachs quickly became one of the first major Wall Street firms to clear the bitcoin futures, while Bank of America and Citigroup have been more cautious and are waiting to see what will happen with the futures.

Hints about what a bitcoin trading desk at Goldman Sachs might look like

Bloomberg’s sources said that the investment bank is currently putting together a team in New York, although it hasn’t yet decided where it will be housed. One of the possible homes for the bitcoin trading desk at Goldman is inside the fixed-income, currencies and commodities unit, or more specifically, within the FICC unit’s systematic trading section, which handles electronic transactions.

The media network also said that a member of Goldman’s principal strategic investments group is also examining potential opportunities. A spokesman for the investment bank also told Bloomberg that they’re looking into the best way to serve “client interest in digital currencies.”

Goldman’s bitcoin trading desk may be an answer to conservativism

However, public statements from Goldman Sachs CEO Lloyd Blankfein have run in the opposite direction. In October, he tweeted that the investment bank was considering ways to deal with the cryptocurrency. Then last month, he told Bloomberg TV that the cryptocurrency was still developing and was too volatile, so they didn’t need a strategy to handle it yet.

There could be a good reason for there to be a bitcoin trading desk at Goldman, however, and it’s not only because the digital currency is exploding in value. Bloomberg added that some of the firm’s practices earlier this month when it started clearing bitcoin futures deterred clients from using its services. The news outlet’s sources reportedly said that Goldman was demanding that some customers “set aside funds equal to the full value of their trade,” and because of that “conservatism,” they decided to take their bitcoin futures business someplace else.