Goldman to Launch Bitcoin Trading Desk

Perhaps nothing quite personifies the success that Bitcoin has undergone as the acceptance by Goldman Sachs of the need for a trading desk.

According to a report by Bloomberg, Goldman Sachs is planning on launching a desk that will allow them to make a market for their clients in digital currencies such as Bitcoin.

This was given to Bloomberg by three unnamed sources from within the company. The loose target for the release of the desk is for the end of 2Q in 2018.

Potential Difficulties

There are many risks that exist in trading something as volatile as digital currencies, yet the sources said that the biggest fear they had was how to effectively store the "inventory".

There have been a number of high profile hacks in recent years of Bitcoin exchanges. For example there was the infamous case of Mt. Gox or just recently, the hack of YouBit exchange.

By storing such large amounts of inventory, Goldman may be opening themselves up to attacks. Hence, Goldman will have to invest quite a bit of money to make sure that they have the best security protocols in place.

Big Step

The reason that this is such important news is that Goldman will the first Bulge bracket investment bank to offer their clients liquidity in digital currencies.

It is also quite significant for just a few months ago, the CEO of one of their rivals, Jamie Dimon at JP Morgan, was calling it a "fraud".

Goldman can clearly see the writing on the wall for large scale adoption of Bitcoin. Unlike their rival in Jamie Dimon, they are not hiding their head in the sand and are moving with the times.

Few Specifics so Far

The sources for the story were not able to give much more information as to the exact composition and location of the team.

However, there is strong reason to believe that Goldman has already begun the recruitment drive for traders. It is also likely that the team will be based out of the head office in New York.

There is also some speculation that the team will most likely be housed in the Fixed Income and currencies division of the bank

According to the report, the Managing Director of the bank, Darren Cohen, is on the lookout for more ways in which the bank can effectively move into the digital cryptocurrency space.

When asked by reporters, a spokesman for the bank did not decline the rumours and stated that the bank was "exploring how best to serve" clients with interest in digital currencies.

Mixed Messages

Although this report confirms that Goldman has finally made the step, there was a different overture that was coming from the CEO.

Although receptive to the idea, Lloyd Blankfein, said in a Bloomberg TV interview a few months ago that Bitcoin was still too volatile to consider.

He claimed that it was still a "developing technology" that needed to advance before they would implement client solutions. He said that if

...it gets more established, and it trades more like a store of value, and it doesn’t move up and down 20 percent, and there is liquidity to it — we’ll get to it

Now that the bank has confirmed that they will be launching a trading desk, perhaps Lloyd Blankfein thinks the technology it properly "developed".

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