Goldman Sachs Group Inc (NYSE:GS) announced that the investment banking giant will be setting up its first Bitcoin (BTC) trading desk at its Wall Street branch. Reports indicate that one of the biggest financial institutions in America is now gearing up to divert some of its capital for sponsoring various investment contracts related to the bitcoin price that will eventually lead to direct bitcoin trading.
Interestingly, the bank will not be entering directly into trading with bitcoin and other cryptocurrencies. However, it has created a separate team that will enter the market on the bank’s behalf.
Bitcoin Enjoys Pop
With most of the leading banking institutions still steering clear of cryptocurrency trading, this announcement by Goldman created quite a ripple in the crypto trading market. And as a result, Bitcoin went up by around $200 per coin. The bank has been clearing bitcoin futures for a few clients similar to another major bank Morgan Stanley (NYSE:MS). However, there are many other major banks that are still not interested in venturing into Bitcoin trading.
Even though the bank has been refuting rumors about its planning to set up a cryptocurrency trading desk until last month, it seems the strategy was already underway. The appointment of Justin Schmidt on April 23 as the Vice President and head of asset markets in the security division of the bank is an indication of its planning.
Similarly, bank executive Rana Yared, will play a key role in setting up of cryptocurrency trading desk. According to Yared, “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.”
Goldman To Bitcoin-Linked Futures Contract
Goldman has confirmed that it will offer its clients a non-deliverable forward, a type of futures contract that will be linked to bitcoin. In November last year, the CEO of Goldman said that bitcoin trading is a “Vehicle to perpetrate fraud.” But now, experts believe that the bank has recognized the enormous potential and growing popularity of the currency, which is why it has decided to start crypto trading.