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Goldman Sachman Bitcoin trading desk- an accident or plan?


Feb 04, 2018 Posted /  27387 Views


Goldman Sachman Bitcoin trading desk- an accident or plan?

There were reports lately that Goldman Sachs is buying a Bitcoin trading desk (paywall). However, now the CEO of world's leading investment bank, Lloyd Blankfein have come forward and given a statement that they are not starting any paywall for bitcoin.  

In a recent interview with CNBC, Lloyd said that though the company provide services to the clients who trade in bitcoin derivatives, the bank is not placing any sorts of bets on crypto or posting any bids. The bank is also not offering Bitcoin with its own money. Nonetheless, the investment bank CEO admits that the bank owns a stake in a trading desk but that was out of misappropriation, which means it was a mistake.

Circle Trade

Interestingly, Goldman was part of the Circle Internet Financial in 2015, a $ 50 million funding round that was structured to allow users to move and receive bitcoin. The main service of the round was Circle Pay that allows people to send and receive money in fiat currencies in the same manner as you would send a text and receive an email.

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Circle says that it's subsequent product in the market, Circle Trade bestows direct liquidity for digital assets like bitcoin. The Company says that with the help of this tool more than $2 billion worth of transactions each month is possible. Further Circle details that it quotes bids and offers for exchanges, large institutions, and the broader crypto market. (In other words, it’s a trading desk.)

Goldman purchased the stake through its principal strategic investment group (PSI), which makes tech company investments that it generally holds for more than five years. The bank's website discloses that the PSI division has a staff of 20 that invests in things like payments and trading technology. This division fits well within Goldman’s contribution and lending operations, which generated $6.6 billion in revenue in 2017 ($4.6 billion from equity securities), up 61% than the year before. However, when asked about the same spokesperson for Goldman declined to comment.

Things have changed

You can well apprehend from the prices of bitcoin that things there are many changes since Goldman acquired its stake in Circle in 2015, as back then bitcoin was worth for roughly $250. The leading cryptocurrency has rallied more than 4,000% since then and can mean less as a means of payment and more of a speculative asset, which have similar flows as to digital gold. As the bitcoin frenzy creeps, hundreds of other crypto assets have been developed. While global exchanges and other professional traders are climbing to get in on the trading mania, Wall Street investment banks, like Goldman, have been comparatively circumspect about joining the frenzy.

Nevertheless, Circle has announced that it is about to launch another consumer product called Circle Invest, which will be introduced in the market by the end of March. In this, the company will provide crypto-investing for retail customers.

However, now we can say that Goldman Sachman who is famous in the market for its trading intelligence, is linked to a company that has extensive trading functionality in the cryptocurrency space.


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Tags: Goldman Sachman Bitcoin trading investment bank Lloyd Blankfein

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