Goldman Sachs’ Bitcoin Desk Would Attract Mega Funds
Prayers answered or simply too good to miss? The Wall Street giant Goldman Sachs is reportedly considering a brand new operation which would be dedicated to Bitcoin trading. Well, if you are working for JP Morgan, no need to worry because if your boss fires you, another Wall Street giant would be more than happy to take you on board.
Bitcoin is the reality and it doesn’t matter how bad the news flow is, traders are still very much interested. There is no doubt that Bitcoin is highly volatile and one should take extra care when trading this derivative. After China banned Bitcoin exchanges, the price of Bitcoin fell below $3,000 and I did mention in my last article that this much drop in price opens the room for opportunity.
The Bitcoin price rallied all the way back above $4,000 and it is more than likely that we could test the recent all-time high again.
Remember, this is despite the fact that we had some more negative news from South Korea which banned Bitcoin ICO. The price action clearly makes one thing clear so far: selling the digital currency is not the best strategy but buying the dip might just be.
One could argue that traders may be reading too much into Goldman opening Bitcoin desk. But the reality is that if Goldman opens a Bitcoin desk, it would not only legitimize the cryptocurrency but it would also attract mega funds. After all, the bank is known for having a deep pocket.
Moreover, Goldman’s core business is trading while JP Morgan makes substantial amounts of money by lending. The Wall Street powerhouse Goldman Sachs is struggling to maintain its revenue and the strongest revenue arm- fixed income dropped nearly 40% during the second quarter. It perfectly makes sense to add another business which may not only help their trading business but down the line, it could also boost its lending operation.
After all, Bitcoin is the biggest threat to the mighty dollar whose purchasing power is diminishing. And Goldman is no stranger to adding exotic derivatives in their trading especially if you consider that the bank was selling mortgage-backed credit swaps.