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"This is not a hoax": Wall Street investment banks are starting to believe in Bitcoin under the pressure of customers



Image: Ed Schipul , CC BY-SA 2.0

The world's largest banks and financial institutions are still trying to avoid cryptocurrency - there are many reasons from the “bad” reputation of Bitcoin to the uncertainty in regulating transactions with virtual currencies. However, one of the most famous investment banks on Wall Street - Goldman Sachs - seems to be the first among the major players who decided to take a step towards a new instrument in the sphere of finance.
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The company will launch the direction of operations with cryptocurrencies - for this, the bank's own money will also be used, in addition, Goldman is working on creating its own version of the bitcoin futures. That was the reason for this, told in its report the publication of the New York Times, and we give the most important of this material.

Bitcoin and Wall Street: a crisis of confidence


Bitcoin was created in 2009 by a man or a group of people hiding behind the pseudonym Satoshi Nakamoto. Cryptocurrencies were supposed to be an alternative to the traditional financial system.

However, until now, major players who obey the rules of state regulation have tried to stay away from Bitcoin. Among the top management of investment banks there are enough skeptics who, in principle, do not believe in the future of cryptocurrencies - for example, the head of JPMorgan Chase Jamie Dimon called Bitcoin a great “deception”, other top managers spoke in a similar vein.

The customer is always right


At the same time, the development of the field of cryptocurrency provoked interest in cryptocurrency from outside, including hedge funds and large investors. Technology companies like Square started offering various cryptocurrency services to users, and trading in Bitcoin futures was launched on the Chicago exchange.

In a conversation with New York Times journalists, Goldman Sachs managing director Rana Yared (Rana Yared) reported that this bank does not consider Bitcoin as a hoax and bubble, like many other colleagues. And since the major clients of the bank declared their interest in investing with this new financial instrument, the company thought about creating a system that would solve this problem, at the same time taking into account all possible risks.

As a result, in the next couple of weeks - the exact launch date is still kept secret - Goldman will start to perform operations with cryptocurrency futures on behalf of clients and using its own funds. In addition, the bank will develop its own “more flexible” version of the Bitcoin contract (settlement deliverable forward contract, non-deliverable forward), which will also be offered to customers.

Perspectives


The bank will not be able to make transactions with “physical Bitcoin”, as the financiers ironically call the cryptocurrency itself. As long as regulatory uncertainty persists with respect to such transactions, traditional companies prefer to work with futures on centralized exchanges.

In addition, financiers in the future will have to solve a number of other problems. One of them is the protection of clients' investments from hacker attacks. Cases of theft of funds from the wallets of users of cryptocurrency exchanges happen with frightening regularity, and Goldman Sachs management acknowledges that "the current bitcoin storage capabilities do not meet Wall Street standards."

Since the crisis of 2008, Goldman Sachs has made serious efforts to become the most technologically advanced company on Wall Street. To do this, new directions and services were launched - for example, Marcus’s own online lending platform, which allowed the investment bank to cover the private sector. The development of the direction of investments in cryptocurrency also fits into this policy, however, they will be available only to large institutional investors.

Other materials on finance and stock market from ITI Capital :


Source: https://habr.com/ru/post/359080/

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