Editors Note: This article comes fromchain news chainnews, reproduced with permission.
, reproduced with permission.
Despite the headlines Bitcoin and other cryptocurrencies have garnered over the past few months, Wall Street investment banking bosses still view the asset as a bouncing, vibrant but often scandal-ridden kid , I cant tell that someday it will cause disaster, so I have always kept an attitude of keeping a respectful distance. However, news from Wall Street said that Goldman Sachs, the most legendary in the financial world, has almost made a decision to officially join the cryptocurrency craze. They will soon start bitcoin trading business and become the first Wall Street bank to open bitcoin trading business .
Many authoritative American media, including the New York Times and Bloomberg, have obtained first-hand intelligence from the deep throat of Goldman Sachs Group: the largest investment bank on Wall Street has set up a cryptocurrency trading team, and the business will be completed by the end of June at the latest. Official operation.
The detailed plan also includes:
Goldman will initially not trade bitcoin directly, but instead use its own funds to trade with clients in a variety of contracts tied to the price of bitcoin.
At this stage, the core objective of the team is to obtain relevant regulatory approvals and prepare countermeasures to deal with the additional risks that holding digital currencies may face.
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Will Wall Street Banks Make Friends With Bitcoin?
This move by Goldman Sachs shows that asset management companies of traditional investment banks have adopted a more open attitude towards cryptocurrencies-for a new enemy that has been indestructible, it may be more beneficial to embrace it.
Traditional investment bankers have been hostile to bitcoin and other cryptocurrencies. If time goes back to a few years ago, people’s first reaction when they heard the word Bitcoin was “used to buy drugs online”. If Goldman Sachs, one of the most arrogant banks on Wall Street, considered launching Bitcoin transactions , will definitely become the most ridiculous decision in everyones eyes.
Dont forget that Satoshi Nakamoto, the inventor of Bitcoin, also said that Bitcoin will replace Wall Street banks - he never said that Bitcoin will bring new revenue streams to these banks.
But the situation has changed dramatically over the past two years.
The first to act are hedge funds and large investment institutions that smell money. All over the world, more and more hedge funds and other large investment investors have shown great interest in investing in virtual currencies. Next are payment companies and trading platforms - the US mobile payment company Square has begun to provide customers with bitcoin payment services, and the Chicago Mercantile Exchange has also allowed customers to trade bitcoin futures contracts since December last year.
However, those regulated financial institutions still keep their distance from bitcoin, and some even close the accounts of customers who have bitcoin transactions. The most typical example is a large investment bank. JPMorgan Chase CEO Jamie Dimon once called Bitcoin a fraud, and many bank CEOs also believe that Bitcoin is nothing more than a speculative bubble in the market.
Bitcoin trading and Goldman Sachs are a somewhat irrational combination, and while they may be fraught with complex risks, its hard not to be interested in them.
Find ways to pave the way for stupid, weird, unreasonable deals.
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What does Goldman Sachs think about Bitcoin?
Rana Yared, an executive at Goldman Sachs in charge of the upcoming virtual currency trading business, said the firm has a very clear understanding of the business. she says:
I wouldnt describe myself as the kind of believer who thinks every day that bitcoin is going to take over the world. Because almost everyone involved has raised their own personal doubts about bitcoin.
According to Rana Yared, after receiving consultations from many hedge funds, endowment funds and foundations, Goldman Sachs board of directors finally passed the decision to start bitcoin contract trading after much consideration. Its more of a service on demand from the customer. For example, some foundations do not know how to deal with donations received in the form of virtual currency.
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Already ahead of most banks in digital currency trading, Goldman Sachs is already offering settlement services for clients who want to buy and sell bitcoin futures on CME and CBOE, and will soon begin using its own Funds to trade bitcoin futures contracts on behalf of clients. In addition, Goldman Sachs will also launch more flexible futures to provide customers with non-deliverable forward foreign exchange transactions.
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From left, Justin Schmidt, who will run Goldman Sachs bitcoin business, Marianna Lopert-Schaye, vice president of strategic investments, and Neema Raphael, who will lead research and development
Justin Schmidt, 38, used to be an electronic trader at Seven Eight Capital, a hedge fund company, and started trading virtual currencies after quitting last year. He said that he chose to join Goldman Sachs because the company has extensive experience in the industry. After Goldman Sachs has received approval from the Federal Reserve and relevant New York agencies, he will join in more direct bitcoin transactions.
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Asset security is currently the biggest risk
Traditional investment banks like Goldman Sachs certainly know that there are many uncertainties in virtual currency transactions. For example, the price of Bitcoin is mainly determined by some unregulated exchanges, and these countries have few regulatory measures to prevent market manipulation. Traders are unsure how regulators will police the digital currency, and the price of bitcoin has seen wild swings earlier this year.
But Rana Yared said that this risk does not surprise them. In addition, they need to pay special attention to high-risk issues such as asset safety.
In order to prevent risks and avoid the tragedy of hackers stealing bitcoins, what Goldman Sachs needs to do now is to try to keep bitcoins safe for customers. At this point, both Rana Yared and Justin Schmidt said that the existing methods of custody of Bitcoin in the market are not up to the standards required by Wall Street.
Goldman Sachs has always been famous for promoting complex financial derivatives. After the financial crisis, they made huge profits from trading synthetic derivatives in the subprime mortgage market, so they also encountered a lot of criticism. Since then, though, Goldman has positioned itself as the most tech-heavy firm on Wall Street. It has been reported before that Goldman Sachs attaches great importance to emphasizing that it has become a technology company. The number of engineers and programmers even exceeds that of Twitter and LinkedIn. The strength of technology talents will undoubtedly strengthen the companys technical security and infrastructure. They also launched an online lending service called Marcus, which for the first time connected casual customers directly with the company.After hearing so much about Goldman Sachs plans in virtual currency trading, are you also ready to move, thinking about how to get involved? It is a pity that Goldman Sachs digital currency trading business is not aimed at retail investors, but only at large institutional investors.
