Goldman Sachs is thinking about getting into trading digital currencies like bitcoin in response to an increase in interest from clients. Goldman Sachs's approach differs from that of JPMorgan Chase & Co. CEO Jamie Dimon, who said last month that he would fire any employee on the spot if they were found to be trading digital currencies. He also said that the market is fake and that the bank does not facilitate trades of an exchange-traded note tied to the price of bitcoin. Goldman Sachs has been doing some research into bitcoin and is ready to open a $500 million hedge fund to invest in cryptocurrencies.
It is interesting to see such big names taking such strong stances on cryptocurrencies right now. JPMorgan thinks crypotcurrencies are fraudulent and not worth their time while Goldman Sachs sees a really great opportunity to invest. Goldman Sachs has taken some risks over the years that have come back to bite them so it'll be interesting to see if their digital currencies idea shakes out to what they hope it will be. The success of bitcoin has opened the way for many other cryptocurrencies to come to the fold. It will be interesting to see how the market reacts to such a new idea like this. These items are pretty much traded like stocks and if the market gets big enough it could become an astronomical industry. It is still pretty early in the life of digital currencies but with big companies paying close attention to it is huge. There are a lot of possibilities for this market and it can effect the overall economy in a big way.
https://www.bloomberg.com/news/articles/2017-10-02/goldman-sachs-said-to-explore-starting-bitcoin-trading-venture
ReplyDeleteNo doubt bitcoin is a big thing right now, and since the exchanges in China is reduced dramatically, the other countries such as the USA could take advantage of this. I think Goldman Sachs is making a risky but a good choice, as there seems to be a lot of opportunities to gain some kind of profit or any kind of gains.
ReplyDeleteI agree with JP Morgan's stance, crypotcurrencies are fraudulent and not trust worthy. I don't think the market is big enough for a digital currency and a new market for trading. It's extremely risky and if Goldman Sachs decides to go through with it, it will either cause their clients big money and a huge loss. If the investment in a new hedge fund goes chapter 11 then Gold Sachs as a whole will take a huge hit and may loose clients. They also may loose clients just for trying the idea because some will feel their money isn't safe or the company is sturdy.
ReplyDeleteI think Goldman Sachs is making a really risky choice by starting a 500 million hedge fund to invest in cryptocurrencies. Why I think the idea is a very appealing to many people, I think legislature will fall behind on it because having a single central currency that can be accepted everywhere is something the government wants and needs. I don't think we will see places accepting bitcoin everywhere however; big risk means big reward, so I guess only time will tell.
ReplyDeleteI think this is a horrible idea by Goldman. Cryptocurrencies could be hacked tonight and not one investor would be insured a dime. The investment industry is nothing without trust and its hard to keep faith in a non-centralized exchanged. Not to mention the volatility alone, Bit-Coin and other cryptocurrencies are very unpredictable.
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