Currently, digital currencies such as bitcoin still have a bad image. This could change. Investment giant Goldman Sachs is considering trade in the digital currency in response to the demand of large investors.
The statement is very cautious: ” “In response to client interest in digital currencies, we are exploring how best to serve them in the space,” said Goldman spokeswoman Tiffany Galvin. The investment bank is reportedly considering entering the trade with bitcoins and similar virtual currencies.
Apparently there is interest from institutional investors in this area. This is not surprising, as bitcoins and similar currencies such as Ethers have risen somewhat in the course of this year. However, this is a highly speculative market. In the long term, the valuation of these currencies will depend on how much they can provide, for example, in payment transactions. So far, Goldman Sachs is making plans for bitcoins, which were mainly based on a kind of chart analysis.
An entry of Goldman into this business would attract attention. The Wall Street has been responding to Bitcoins. The controversial arose when JP Morgan head Jamie Dimon called bitcoins a fraud. Only the technology behind the bitcoins, the so-called blockchain, attracts great interest in the traditional financial sector. To date, major banks such as JPMorgan Chase or Goldman Sachs are mainly involved in experiments using the blockchain technology, which logs bitcoin transactions, but is increasingly being tried out in the classic financial world.
The commitment is still at an early stage, whether a corresponding business unit is actually established, is unclear. The bank must pay attention to its own reputation. If there are failures such as the theft of Bitcoins by hackers or fraud with new currencies, the image of the bank might be affected.
Goldman Sachs has been looking for new sources of profit for some time and is open to technological innovations. The bank also cooperates with speculative investors, such as hedge funds. How it decides whether to incorporate Bitcoin & Co into its program is likely to have an impact on the extent to which this area is accepted by the traditional financial sector.
If a large Wall Street player officially entered the digital currency trading, this could help crypto currency from the niche into the mainstream. Despite increasing popularity, the Bitcoin is still struggling with image problems, because it is good because of high anonymity for illegal business offers. Noteworthy bankers and economists also regularly warn against violent price fluctuations and bubbles speculation.