Currency

Goldman Sachs Leads Major Investment Banking into Bitcoin Market


May 07, 2018

Financial institutions are in a race to figure out how to leverage the crytpocurrency craze that continues to build momentum globally.  Some have dipped their toes into the pool and have started using blockchain – the decentralized database technology supporting cryptocurrencies – to power financial transactions.  Spain’s BBVA, for instance, just delivered a global first, completing a corporate load on blockchain

But, while many investment banks are options for adding Bitcoin and other cryptocurrency trading to their operations, Goldman Sachs is taking the lead.  The world’s second largest investment bank confirmed it will be opening a Bitcoin trading operations for futures and other derivatives. 

Goldman isn’t the first to offer Bitcoin futures – CME Group and Cboe both began offering them in December – the market entry by the global giant is a sign that the cryptocurrency market is legitimate and paves the way for others to follow suit.  By easing into the space and fitting Bitcoin into its existing investment infrastructure, Goldman is giving its clients access to the market, while limiting exposure to risk. 

It’s a step towards a full-clown crypto exchange, and while it doesn’t discount the possibility in the future, Goldman a full trading platform is not currently in the works.  A full cryptocurrency trading platform will take time, and would need regulatory approval.  With so many questions still unanswered around regulation, and with security concerns high as the cyber underworld continues to attack the Bitcoin market, this is a logical first step.

But, it’s a market that will eventually become too big to ignore for traditional investment institutions, as more and more independent cryptocurrency exchanges emerge, building on the growth of Coinbase, Bittrex, Binance, and others. 

For now, Goldman, which has long been a tech-focused institution, is taking a seemingly safer path into the crypto market, which will likely see many of its competitors follow a similar path.




Edited by Erik Linask

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