Goldman Shuns JPMorgan's Dimon - Plans Bitcoin Trading Operation

While JPMorgan CEO Jamie Dimon said he "would fire" any employee found trading Bitcoin, Goldman Sachs' leadership is embracing reality as WSJ reports the bank is weighing a new trading operation dedicated to bitcoin and other digital currencies.

On the heels of IMF Chief Christine Lagarde's comments that:

"... the technology itself can replace national monies, conventional financial intermediation, and even puts a question mark on the fractional banking model we know today... So I think it may not be wise to dismiss virtual currencies."

Bitcoin's price has continued higher - erasing the losses from China and Jamie Dimon's comments...

And now, according to people familiar with the matter, The Wall Street Journal reports that Goldman Sachs is the first blue-chip Wall Street firm preparing to deal directly in this burgeoning yet controversial market.

“In response to client interest in digital currencies we are exploring how best to serve them in this space,” a Goldman spokeswoman said.

Goldman’s effort is in its early stages and may not proceed, the people said. The firm’s interest, though, could boost bitcoin’s standing among investors and fuel the debate around digital currencies, which were initially viewed as havens for illicit activity but are pushing further into the mainstream investment world.

Goldman’s seeks to serve a growing cadre of institutional investors wagering on bitcoin.

Its effort could eventually entail a team of traders and salespeople making markets in bitcoins much as they do Japanese yen or shares of Apple Inc.

Keeping abreast of the day-to-day cryptocurrency market could also position Goldman to capitalize on further development of this market. Digital-currency proponents envision a world where coins will be widely accepted by online retailers and companies will use the tokens for cross-border commerce.

Some 70 hedge funds now invest in cryptocurrencies, according to Autonomous NEXT.

Already, a handful of nonbank finance firms, such as DRW Holdings LLC’s Cumberland Mining and Genesis Global Trading Inc., broker bitcoin trades for institutional investors that want to buy or sell larger amounts than exchanges could handle.

That is a role that banks could easily step into.

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This is going to be hard for Dimon to swallow...

But we do suggest a slight hesitation to the squid embracing another illiquid asset-class. We suspect as far as volatility goes - you ain't seen nothing yet.

With its fixed-income division revenues down 21% from last year through June, dragged down by poor performance in commodities and currencies (both near record lows in volatility), it appears Goldman is looking for another asset - with volatility - to trade.

WSJ also notes that Goldman’s effort involves both its currency-trading division and the bank’s strategic investment group, the people said. That suggests the firm believes bitcoin’s future is more as a payment method rather than a store of value, like gold.

Comments

Manthong VD Mon, 10/02/2017 - 12:20 Permalink

 
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That tells me Goldman is already sitting on a pile of electrons and wants the muppets to buy in. Anything Goldman can trade I want no part of.

In reply to by VD

Manthong Manthong Mon, 10/02/2017 - 12:24 Permalink

 
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I really don’t have anything against crypto, in fact this might be an opportunity for asymmetrical warfare. Any time Goldman buys in, move to another crypto.

In reply to by Manthong

Bunga Bunga nope-1004 Mon, 10/02/2017 - 14:39 Permalink

Don't get too excited. Many Bitcoin exchanges are very thinly regulated if regulated at all. Starting a trading operation on Wall St 24/7/365 is a completely different venture. Lots of regulation and much higher cost. They can't compete in order to become dominant. GS is also a dinosaur which will burn a lot of money in the beginning, while almost all crypto exchanges started small in garage like setting and became big by growth. It's like GE trying to make can openers in the US and to fight the small Chinese manufacturers.

In reply to by nope-1004

Ramesees BaBaBouy Mon, 10/02/2017 - 12:38 Permalink

Goldman is a market maker - if their customers want to make a trade that isn't available in the market, Goldman will often take the other side of that trade as a service to their customers.  Oftimes, their customers WANT the Goldman trade to fail, as it's a hedge against a larger position.I know you've all seen The Big Short, think about it like that - they made a market (took the other side of a trade) in MBS insurance for a customer when there was nobody else offering that product.  Goldman would have to disclose if they had a large crypto investment at this point, so I doubt they've got one.  All of their traders do, individually, though, and their customers are clamoring for it. It's hard to tell where we are on the stages of a bubble chart - we may be way down at "Media Attention"/"Institutional Investing" or we may be at "Bull Trap".   Maybe Bitcoin's price goes up, maybe it goes down, but the Blockchain is a very cool technology, and Bitcoin is the Coca Cola of cryptocurrency - the brand name.  There will be (already are) lots and lots and lots of others and eventually one may surpass Bitcoin, who knows. 

In reply to by BaBaBouy

The_merovingian BaBaBouy Mon, 10/02/2017 - 12:42 Permalink

They don't have a choice, either they provide what clients want or they lose out. Just surprised they handle Bitcoin as a currency and not as an asset. Transaction rate doesn't indicate it will be a heavily used currency anytime soon, even after segwit. The only way to manipulate the price is through washtrading and that won't work very well with Bitcoin, hence the dragging feet's.

In reply to by BaBaBouy

aurum4040 Manthong Mon, 10/02/2017 - 12:30 Permalink

Goldman already called the previous top, damn close I should say, when they said BTC would hit $4800. They've been in on BTC since before the August fork. They jumped in at 1.8k after the fork scare, pumped it to $5k, dumped, and bought back in at $3k. And I supposed you don't own anything because Goldman trades nearly everything at this point. Especially hammered tungsten Comex futures. They don't trade Ethereum, yet. 

In reply to by Manthong

WillyGroper Mon, 10/02/2017 - 12:19 Permalink

embracing reality is the fractionalization of digital money created by the laundering mafia to begin with.welcome your overlords.https://www.youtube.com/watch?v=M1Dfa-g0DPY save it mosley...i know that's where we're going to be coralled & disconnected.the tech could be used for good, but like everything else the satanists get ahold of, they pervert it for their evil agenda.

Father ¢hristmas Mon, 10/02/2017 - 12:26 Permalink

When I corner the silver market and crash JP Morgan Chase, I am going to have a beer with Lloyd and massage his bald head as "Wind Beneath My Wings" gently plays late at night at Comet Pizza.

Totally_Disill… Mon, 10/02/2017 - 12:36 Permalink

Check the box...support and opposition of Bitcoin trade.  That ought to keep the Sheep busy.   Now the bankster cabal can get on with clearing their sheets before the collapse.

coast1 Mon, 10/02/2017 - 12:50 Permalink

I posted several times yesterday that the NSA started the plan for crypton currency in 1996, to possibly be used for NWO world currency...Are you starting to believe me now?   Anypone who gets into crypto, whether it makes money or not, you are buying into your own enslavement and/or advancing the NWO world currency.  I have hours of research on this subject.

coast1 FreeShitter Mon, 10/02/2017 - 13:12 Permalink

I am sorry I busted your bubble, and yes hours of reading...Every article I could get my hands on...Kind of addicted when I find something interesting.. Its sad when people do not want to hear the truth, they ignore it.. Then they put down the one giving them the truth, with all kinds of references out there that you could be researching..did you do any research?   No, and you are the type that will take your enslavement...This is why i warn all of you, wake up and see what is going on...I am trying to help you here guys!!   IMF head even admits it...Bitcoin was a test run for the rothchild zionists....do you think they run almost the entire world because they are stupid?

In reply to by FreeShitter