Major banks and financial institutions have mostly stayed away from the volatile virtual currency market, with some even outright denouncing the value of virtual coins such as Bitcoin. However, Goldman Sachs has recently announced that they are actually moving ahead with starting an internal Bitcoin trading operation that will be offering clients options to invest in Bitcoin and other cryptocurrency futures. Clients will not necessarily be trading the coins themselves, but they will instead be able to trade in a variety of contracts that are linked to the prices of cryptocurrencies such as Bitcoin.

The company is, however, reportedly still looking to get regulatory approval so that it can start to hold and trade the coins for its clients.

Volatile market

Bitcoin and other currencies such as Ethereum, Ripple, and Litecoin, have had significant drops and spikes over the past few months. The instability and high risk of the virtual currencies are the main reasons why most financial institutions have so far been staying away from investing their time and money into trading them. Some financial institutions on Wall Street have criticized the growing popularity of Bitcoins and other cryptocurrencies and have considered them as nothing more than a speculative bubble destined to burst.

There are currently a lot of controversies surrounding cryptocurrencies, which are unregulated by nature.

This includes the rampant market manipulation of large exchanges and the growing concern of large-scale hacks. Regulations have also taken its toll on the prices of virtual currencies as more and more governments and banks have stepped up to try and control speculative trading.

Betting on Bitcoin

As reported by The New York Times, Goldman Sachs executives are still pretty much holding on to their skepticism over the new technology, but they are reportedly confident that they will be able to create a system that would minimize its risks.

Rana Yared, a Goldman executive, mentioned in an interview that they aren’t necessarily die-hard believers of Bitcoin, but they do have the interest of their clients in mind. The company understands that Bitcoin is not a fraud, as some other companies will have people believe, and that some people still want to invest in it as a valuable commodity, similar to gold and other precious metals.

Growing demand

The decision to offer Bitcoin trading contracts was reportedly not an easy one to make for Goldman Sachs executives as the proposal had to go through a lot of internal examinations. The company’s board of directors also had to close look at the proposals before it approved the new products. Investors and hedge funds across the globe have already started offering cryptocurrency services to customers, but Goldman Sachs will be the first bank in Wall Street to dive straight into Bitcoin trading.
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