Goldman Sachs, the global finance market’s second largest investment bank behind JPMorgan, will begin trading bitcoin futures for its clients, once major exchanges list bitcoin futures in the upcoming weeks.
According to Bloomberg, a source familiar with the company’s bitcoin futures trading plan stated that in the short-term, bitcoin future trades made by Goldman Sachs on behalf of its clients will be processed on a case-by-case basis.
In a statement, Goldman Sachs spokeswoman Tiffany Galvin said:
“Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process.”
Goldman Sachs CEO Enthusiastic
Lloyd Blankfein, the Goldman Sachs chairman and CEO since 2006, said “if bitcoin works, we’ll get to it.” Last month, in an interview with Kayla Tausche from CNBC, Blankfein noted that he is open minded towards bitcoin, because many assets and technologies he viewed as “stupid and wrong” turned out to perform and work well. Blankfein stated:
“I have an open mind about these things [bitcoin and cryptocurrencies] because there are a lot of things that work really really well today that I thought was stupid and wrong. I have a much more open mind about this and I know a lot of history of finance and I pointed out that there was a time wherein people only took gold coins.”
More importantly, Blankfein emphasized that the abrupt shift from the gold standard to the fiat currency system was rejected and failed to be adopted in the beginning. If bitcoin is a natural progression from hard money to digital money, Blankfein explained that bitcoin holds the potential to become the next gold and reserve currency of the world.
“A five dollar gold coin was worth five dollars because it had five dollars worth of gold in it. Then they issue paper money that is backed by gold in the treasury. Then one day, they issue paper money that does not have the backing of gold. There was no pledge that if you turn it in, I’ll give you five dollars of gold. It is fiat money. I say this piece of paper is worth five dollars and so therefore it is five dollars and a lot of people did not take that for a long time. But, now they do without question. You move a little bit further and you get bitcoin that is not a fiat currency so I don’t trust, it and I don’t like it. On the other hand, if it works, I say maybe it was a natural progression from hard money to digital money, explained Blankfein.
CBOE’s Bitcoin Futures Launch on December 10
The bitcoin futures exchange of the Chicago Board Options Exchange (CBOE), is set to launch on December 10, merely two days from today. Large-scale investment banks and hedge funds such as Goldman Sachs and Man Group plan to invest in the cryptocurrency upon the launch of CBOE and CME’s bitcoin futures exchanges, given that those two markets are expected to significantly increase the liquidity of bitcoin.
Goldman Sachs and its clients will likely utilize CBOE and CME bitcoin futures trading platforms to invest in bitcoin by mid-December.
With Goldman Sachs and JPMorgan optimistic in regards to the growth of bitcoin as the new gold and robust store of value, other major banks and financial institutions will inevitably follow.
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Last modified: May 20, 2020 9:17 PM UTC