It’s finally happening. Months after announcing that they had created a trading desk dedicated to the crypto markets, Goldman Sachs is stealthily beginning to onboard clients for their new Bitcoin derivatives product.
Part of the excitement surrounding this event is that Goldman Sachs, one of the largest financial institutions in the world, occupies something of a leadership role among its peers. It’s move into crypto not only marks a new potential arena for institutional competition, but it also carries with it symbolic significance: cryptos are a thing of the future (and if that weren’t the case, Goldman would not have entered it).
The main point here is that Goldman Sachs’ move can potentially drive the next long-term crypto boom.
Bitcoin derivatives–namely futures and options–are nothing new. They’re already trading on two major exchanges: the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE).
Though Bitcoin derivatives have been trading over the past year, the volume has been pretty modest. Of course, these products were launched right at the moment when cryptos across the board were beginning to plunge. Not surprisingly, neither exchanges seem very enthusiastic about the products post-launch.
Meanwhile, a host of other startups began work on developing crypto exchanges. LedgerX is currently seeking Commodity Futures Trading Commission (CFTC) approval.
And there’s also Baakt, whose partnership includes operational support from key leaders from the Intercontinental Commodity Exchange (ICE) and New York Stock Exchange (NYSE) plus collaborations with Microsoft and Starbucks. Their exchange is about to launch next month, on December 12th.
Interestingly, Baakt’s product differentiates itself from those of the CME and CBOE in that its Bitcoin derivatives products are physically settled upon contract expiry.
So where does Goldman stand amid these developments? They’re quietly and carefully testing the markets while their clients, according to a Goldman source, are always calling up to ask where the crypto markets may be heading and how they might be able to get in on the action.
If you’re interested in investing in crypto, take a look at the big picture. Crypto markets are down. While most short-term speculators and retail investors have largely abandoned the markets, it might be a good idea to stay away if institutions too are mostly steering clear of the markets.
The crypto markets bifurcate into two distinct realms: digital currency and digital ledgers. So which fields are financial giants interested in? The truth is that they’re looking to compete in both realms. Digital currency and digital ledgers.
Cryptocurrencies and crypto-tech make up the broader part of an “emerging industry.” Emergence is synonymous with “change” and “volatility,” so expect both, and pay particular attention to the changes.
Most importantly, if you don’t share the same vision as Goldman Sachs, Morgan Stanley (see their new report), Fidelity Investments, and other large institutions, then don’t enter this market.
But if you do share the same vision with these giants that not only want to invest in the crypto market but also aim to shape it, then now is the time to enter the markets, while prices are low.
If you don’t have the time or expertise to exercise due diligence and conduct thorough research, then contact us at IRABitcoin. We are ready to assist you.