Goldman Sachs, one of the biggest financial institutions in the United States, will launch a Bitcoin trading desk, saying that Bitcoin ‘is not a fraud', and it announced its plans to eventually buy and sell cryptocurrency, according to a report from the New York Times on Wednesday, May 2.
In a dynamic move that will set the investment banking giant apart from its Wall Street rivals, Goldman Sachs shall begin this plan by offering a variety of contracts with Bitcoin exposure prior to entering the trading arena, by means of utilizing its own funds.
Rana Yared, a Goldman executive tasked to watch over the creation of the trading operation, said that the bank had been ‘inundated' with requests from interested clients.
Amidst the skepticism on this decision, the bank received enough interest from endowments, hedge funds and other institutional investors that its board of directors voted to approve the move that will make Goldman Sachs to become the first-ever major American bank to utilize its own funds in order to trade cryptocurrencies or derivatives of cryptocurrency.
She told NYT, "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."
As a response to a past statement in which competitor JPMorgan CEO Jamie Dimon's infamous labeling of Bitcoin that it is a fraud and other chief bank executives called it nothing more than a speculative bubble, Ms. Yared said that Goldman "had concluded Bitcoin is not a fraud."
Nevertheless, even if it was publicly announced by Goldman CEO Lloyd Blankfein during its all-time price highs back in December 2017 that Bitcoin "is not for him", Ms. Yared was quick to dispel any speculations that the bank was a ‘Bitcoin believer' and explained that many of the people involved with the operation still remain skeptical of the cryptocurrency.
She 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 skepticism brought to the table."
In time, the bank is hoping that it will get regulatory approval from the Federal Reserve and state-level authorities to start trading actual Bitcoins (ironically called "physical Bitcoins"), and when that approval happens, it will surely solidify the flagship cryptocurrency's status as a distinctive financial asset.
Yared said, "It is not a new risk that we don't understand. It is just a heightened risk that we need to be extra aware of here."
Led by the bank's first-ever ‘digital assets' or cryptocurrency trader Justin Schmidt, the operation is expected to commence within the next few weeks. Once it launches, Goldman Sachs shall use its very own funds to trade Bitcoin futures on their clients' behalf.