Goldman Sachs will trade bitcoin futures
The bank has hired a dedicated digital asset trader and is exploring regulatory and security capabilities.
Over the next few weeks, American multinational investment bank Goldman Sachs will start trading bitcoin futures contracts on behalf of its clients and create new, flexible forwards contracts, according to news reports.
Tearsheet reported that the financial services business recently hired Justin Schmidt as the company’s first ever digital asset trader. For now, Schmidt has been placed on Goldman’s foreign currency trading desk.
Goldman Sachs strategic investments executive Rana Yared told the New York Times that the bank will use its own money to trade what they’re calling non-deliverable forwards. However, a launch date has not been set.
There is no plan to buy and sell actual bitcoins, although a team is examining regulatory demands and risks. The company also acknowledged that it must find a way to safely and securely hold bitcoin for its customers.
It resonates with us when a client says, ‘I want to hold bitcoin or bitcoin futures because I think it is an alternate store of value’. 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.
Goldman Sachs strategic investments executive Rana Yared discussing bitcoin futures
A healthy level of uncertainty and doubt surrounded the possibility of getting involved with bitcoin futures.
“I would not describe myself as a true believer who wakes up thinking bitcoin will take over the world,” Yared said. “For almost every person involved, there has been personal skepticism brought to the table.”
Long-term future pricing options has been touted as a vote of confidence for the virtual currency economy, potentially paving the way for less market volatility and further increased investment over time.
Bitcoin futures were recently trading at their most voluminous levels since launching in December last year. In a crypto-market update, Cboe Options Institute senior instructor Kevin Davitt revealed that bitcoin futures trading on Wednesday was three times higher than the average daily volume (ADV) of around 6,600 trades.
Cboe, the largest US options exchange, began trading bitcoin futures in mid-December last year. About one week later, Chicago Mercantile Exchange (CME), started offering futures contracts to prospective investors.
Cboe Futures Exchange (CFE) also petitioned the Commodity Futures Trading Commission (CFTC) to lower the minimum buy and sell prices of its futures contracts, just a few months after officially launching the products.
Late last month, Cboe urged the Securities and Exchange Commission (SEC) to permit the advancement of cryptocurrency exchange-traded funds (ETFs) in the same way that commodity-related products are allowed.
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