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Goldman To Set Up Cryptocurrency Trading Desk By June 2018

Swap firm Goldman Sachs is getting into cryptocurrencies. (See also: Goldman All in all Bitcoin Trading.)

According to a Bloomberg report, the firm is setting up a mercantilism desk for cryptocurrencies to be operational by June or earlier. It intends to become a trade in maker for cryptocurrencies and is working out details related to their security and incarceration. It has previously had a cautious stance towards digital currencies. Goldman CEO Lloyd Blankfein divulged bitcoin cannot be ruled out and the the company acts as a clearing agent for expects contracts. According to reports, Goldman is demanding 100 percent verge from brokers to clear trades. (See also: Goldman To Institutional Investors: Don’t Turn ones nose up at Bitcoin.)

But the setting up of trading desks may be a win-win for digital currencies and Goldman itself. For cryptocurrencies, it develop b publishes liquidity and depth to the market. This is expected to curtail wild appraisal swings for cryptocurrencies and bring price stability to the markets. At the same often, it will boost Goldman’s profits. The firm’s commodities division, where the new desk influence be placed, has reported losses on the back of a swoon in commodity prices and downgrade client activity. 

As Matt Levine from Bloomberg points out, bitcoin’s volatility mightiness be an interesting play for Goldman. “You want a nice happy medium, variable enough to get some action but not so volatile that you’re constantly losing your shirt,” he lists. With a range of between 75% to over 100% this year, bitcoin is mass the year’s most volatile assets. For context, gold, a commodity to which bitcoin is on numerous occasions compared, has mostly moved upwards in price as its volatility hovers to parts below 30. Traders prefer volatility in an asset’s price since it creates openings for arbitrage. As such, bitcoin’s volatility percentages could open up a new roots of profit for Goldman. 

Several institutional traders are exploring or have already turned investments in cryptocurrencies. For example, Bloomberg earlier reported that analysts at JPMorgan Track & Co. (JPM) are exploring realized volatility for bitcoin. This could be a precursor setting up a trading desk. In addition, hedge funds dealing in cryptocurrencies induce reported stellar gains. (See also: Hedge Funds Reap Spectacular Turn ins From Cryptocurrencies.)

Investing in cryptocurrencies and other Initial Coin Contributions (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the novelist to invest in cryptocurrencies or other ICOs. Since each individual’s site is unique, a qualified professional should always be consulted before garnering any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the message contained herein. As of the date this article was written, the author owns 0.001 bitcoin. 

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