One of the world’s largest investment banks is quietly holding high-level discussions about establishing a dedicated cryptocurrency trading desk.
Bloomberg reports that Barclays Plc, the second-largest bank in the UK, has begun gauging client interest in setting up a cryptocurrency trading desk.
The discussions are still preliminary, sources say, and the bank is attempting to determine the feasibility of such an operation, as well as whether there is sufficient client demand to justify a full-featured trading desk.
“We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market,” Barclays spokesman Andrew Smith told the publication, adding that the bank does not currently have any plans to open a cryptocurrency trading desk.
Goldman Sachs is also rumored to be taking steps to set up a cryptocurrency trading desk that will begin making markets by the end of the second-quarter, though Goldman CEO Lloyd Blankfein has publicly denied this report.
Notably, the bank already has indirect ownership in a cryptocurrency trading desk through its investment in Circle, whose over-the-counter (OTC) desk handles several billions of dollars in cryptocurrency trades per month.
If investment banks did begin making markets for cryptocurrency trades, it would likely make hedge funds and other institutional investors more comfortable with adding cryptoassets to their portfolios.
Industry insiders have repeatedly identified custodial issues as one of the primary reasons that institutions have been hesitant to dabble in cryptocurrencies, and banks could likely solve this particular pain point for their clients.
Last week, a group of Barclays analysts issued a client note that took an extremely critical tone on Bitcoin. The team, which was led by Joseph Abate, argued that interest in Bitcoin spreads like a disease and that by this point most investors have already either been infected or developed an immunity. This, they claimed, provides Bitcoin with a bearish outlook as there are more potential sellers than prospective buyers.
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Josiah is the former U.S. Editor at CCN.com, where he focused on financial markets. He lives in rural Virginia. Connect with him on LinkedIn or email him directly at josiah.wilmoth(at)www.ccn.com.
