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Goldman Sachs Plans on Offering Financial Products Linked With Bitcoin to its Clients

According to some recent information, Goldman Sachs, a banking giant from the United States of America, is planning on investing money in the development of a variety of financial contracts linked to the price of Bitcoin and offering these products to its clients.

Rana Yared, one of the executives at Goldman Sachs, gave a statement to the New York Times in which she said the banking institution was evaluating the advantages and disadvantages of getting involved in the aforementioned type of transactions.

Yared added that the decision to develop new products related to the world’s most popular cryptocurrency is the conclusion of the company that Bitcoin was not a fraud and, even though it does not have the characteristics of a currency, many of the bank’s clients would like to invest in it and own it. This is something similar to what happens with the gold, but in this cas with the limited amount of tokens that can be acquired through the cryptocurrency mining process.

Nevertheless, the executive from Goldman Sachs brought out the doubts that the majority of the executives in the company have when it comes to working with cryptocurrencies and affirmed that almost all the people involved in the new project have expressed a certain level of scepticism. In consequence, Rana Yared said the motivations of the clients were the main reason to go forward with the project. 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. It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternative store of value.’”

The executive also said that a team was already working on designing strategies and implementing the operations with cryptocurrencies one the necessary regulatory approval is obtained and the risks associated with the virtual currencies are fully comprehended and the company is able to manage them. 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.”

The creation of the aforementioned team was announced on April 23rd, 2018, when Julian Schmidt was named the vice president in charge of the digital currency markets sector at Goldman Sachs. Schidt was working as an electronic trader at the hedge fund Seven Eight Capital and later quit that job and started trading with cryptocurrencies on his own until assuming the position at Goldman Sachs. According to Schmidt, one of the main reasons to take the job at Goldman Sachs was the company’s sophistication: “In terms of having a trusted institutional player, it has been something I have been looking for in my own crypto trading – but it didn’t exist.”

Before this announcement, Goldman Sachs had denied a series of rumors circling around the internet since October last year regarding the possibility for the banking giant to open a trading desk for Bitcoin. During the World Economic Forum in Davos, the CEO of Goldman Sachs, Lloyd Blankfein, said this was misinterpreted and the company would only like to be more open to this type of investments provided they were requested by the clients.

Goldman Sachs is already offering some services related to the world of cryptocurrencies, although not directly, but performing as an intermediary. The bank is offering its clients to do business with the Bitcoin futures contracts launched by CBOE and CME Group. If Goldman Sachs starts offering its clients services directly linked with cryptocurrencies, it would become one of the first big banks from Wall Street to associated itself with this emerging ecosystem.

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