More Fundhouses and Investment Banks Could Start Accepting Cryptos Following Goldman Sachs
After what seemed like an endless wait, Wall Street trend-setter Goldman Sachs has finally set up a trading desk dedicated to digital assets.
This is the first time the leading investor has taken a position on cryptocurrency-based assets and the move, many feel, may pave the way for other investment companies to follow in the coming weeks.
Though the company has expressed its intentions, the actual functioning of this trading department within Goldman Sachs may start later.
Only Futures and Derivatives May be Traded
It is not as if Goldman Sachs is going the whole hog.
It is still taking measured steps and this decision to set up a trading desk for Bitcoin futures is just the first break from its clear position that in their view, cryptocurrencies don’t have a legal backing.
Goldman Sachs has roped in crypto trader Justin Schmidt to lead the operations, and the professed aim is to deploy the investment company’s funds to buy and sell Bitcoin futures representing their clients. They may take a longer time to start dealing in the currencies directly.
Pressure from Clients Forced Goldman
According to reports, there was tremendous pressure from within the organization and from outside, particularly large institutions, like foundations and endowment funds which make huge investments.
These institutions have been receiving funds in Bitcoin from those who have enriched themselves with the digital asset. These requests finally prodded Goldman Sachs to bite the bullet.
There is, however, some reservation still in the top management at the Wall Street firm since the stigma attached to Bitcoin and most other cryptocurrencies of being used for payments in the dark web and associated with criminal transactions cannot be wished away.
It is true that many leasing banks and financial institutions have made heavy investments in crypto assets and it is equally valid to say that there are banks still wary of Bitcoin as an investment avenue.
Barclays Bank, for example, has expressed its reservations on choosing to invest in cryptocurrencies. Additionally, International Monetary Fund Chief Christine Lagarde had also taken a negative position about a year ago but appears to have taken a nuanced stand now.
Other Investment Firms to Follow?
There is no doubt that Goldman Sachs commands enormous respect among the investment community and it may not be wrong to claim that many of them had held themselves back until the leader showed the way.
A large number of banks are also taking into consideration the phenomenal growth achieved by companies like Coinbase, which may beat these banks soon in terms of their worth and value.
Now that the die has been cast by Goldman Sachs, it may not take long before there is a floodgate of agencies offering investors products based on crypto assets.
Wealthy individuals like Peter Thiel, the founder of PayPal, can be cited as a typical example of seasoned business leaders coming to accept the potential in the future of Bitcoin.
Thiel has invested in a startup that may play a big role in popularizing the trading in cryptocurrencies among the masses.