Bitcoin Futures Contracts Planned By Goldman Sachs

Announcements, News | May 3, 2018 By:

Wall Street giant Goldman Sachs is reportedly launching a bitcoin trading operation by offering bitcoin futures contracts.

The New York Times reports Goldman Sachs will be using its own funds and will sponsor a variety of investment contracts that are tied to the price of bitcoin.

“In the next few weeks — the exact start date has not been set — Goldman will begin using its own money to trade bitcoin futures contracts on behalf of clients,” the report said. “It will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.”

Last year, there were rumors Goldman Sachs was planning to launch a cryptocurrency trading desk. Goldman Sachs CEO Lloyd Blankfein put an end to the rumors in January, saying that the bank had not yet made plans to establish a “principle bitcoin business.” But he did say that the bank would be clearing futures in bitcoin for some of its futures clients.

Rana Yared, one of the Goldman executives overseeing the creation of the trading operation, said the decision to begin trading bitcoin contracts resulted from a growing number of inquiries from clients who expressed their interest in holding bitcoin.

“Goldman Sachs had received inquiries from hedge funds, as well as endowments and foundations that received virtual currency donations from newly minted bitcoin millionaires and didn’t know how to handle them,” Yared. “The ultimate decision to begin trading bitcoin contracts went through Goldman’s board of directors.”

The bank’s decision comes along with a lot of uncertainties, as the crypto market still remains highly unregulated. Yared said it’s not a new risk that they don’t understand. It is just a heightened risk that requires extra awareness.