The Wall Street banking giant is now fully in when it comes to letting customers trade futures of bitcoin through one of its desks in New York. Goldman Sachs is the first regulated financial institution in Wall Street to provide such a service.
One of the major reasons why the banking giant decided to go this path is as a result of the numerous inquiries received from endowments, hedge funds, and foundations that had received donations from Bitcoin millionaires.
What You Need to Know
The legitimacy bar for cryptocurrencies has been increased now that the banking giant is about to facilitate the trade of bitcoin by financial institutions. They are starting off with extreme caution and they won’t trade actual bitcoin at first.
Rather, Goldman Sachs will use its own funds to trade the contracts of Bitcoin futures for customers. For the past few months, Bitcoin has been a rebound. There was an increase in interest for the cryptocurrency over the course of 2017, which also skyrocketed the value of the digital currency.
The value of the cryptocurrency tripled in the second half of 2017, getting to an all-time high of $20k before it declined to $8k in February this year. The value of the digital currency was as high as $9,400 before officials in South Korea invaded the largest digital currency exchange in South Korea, bringing the value down to $8,600.
Digital Currency Mindfulness
Bitcoin started this year on a very rough path, and it suffered a significant loss during the first three months of the year, resulting in a 48 percent decrease in its value. Hayes noted that the volatility in the price of the bitcoin will likely increase as more players are venturing into the derivatives market for the digital currency.
Hayes said people have been lulled into the crypto-space with a market that increases every day, and this could further increase the volatility of the digital currency just the way it did in December last year.