Saturday, 21 December 2024
Goldman eschews bitcoin but wants to help clients crypto-trade
Goldman Sachs Group Inc is trying to figure out how to cater to investors who want to trade bitcoin even though the digital currency remains too volatile for the Wall Street bank to trade itself, according to comments by a representative and its chief executive officer on Thursday.
At an event, CEO Lloyd Blankfein said there was no imminent need for Goldman Sachs to develop a strategy around bitcoin, which rose to an all-time high of US$11,395 on Wednesday only to lose one-fifth of its value on Thursday.
"Something that moves up and down 20 percent in a day doesn't feel like a currency, doesn't feel like a store of value," Blankfein said at an event hosted by Bloomberg to promote Goldman's 10,000 Small Businesses endeavour.
The bank will trade in bitcoin if it becomes more established, trades in a less volatile manner and has more liquidity, he said.
Even so, Goldman has been looking at ways to facilitate bitcoin trades for customers. It is still doing so, spokeswoman Tiffany Galvin told Reuters in a statement.
"In response to client interest in digital currencies, we are exploring how best to serve them in the space," she said.
Established in 2009 as a digital currency not backed or regulated by governments, bitcoin was mainly supported by technology enthusiasts at first. Its reputation was marred by hacks that lost investors billions of dollars, and by those who allegedly used the currency to mask illicit dealings.
But as its price has soared, traditional investors have entered the market, and major exchanges plan to introduce bitcoin futures contracts. The technology that underpins bitcoin trading, called blockchain, has also become popular among large financial institutions that see it as a mechanism to more cheaply and efficiently handle other transactions.
Prominent Wall Street executives and U.S. officials have been split on whether digital currencies themselves are worth spending time and money on.
JPMorgan Chase & Co CEO Jamie Dimon called bitcoin a "fraud" at a conference in early September, while Morgan Stanley CEO James Gorman characterized it as "more than just a fad" at an event a few weeks later.
Meanwhile, Citigroup Inc CEO Michael Corbat predicted governments will issue digital currencies of their own, something a U.S. Federal Reserve official said the central bank is considering at an event on Wednesday. The following day, another Fed official called bitcoin a threat to the financial system.
Re-disseminated by The Asian Banker from Channelnewsasia.com
