Cryptocurrencies may have naysayers on Wall Street, but Goldman Sachs isn’t one of them, according to news from The Wall Street Journal.
Citing people familiar with the matter, the Wall Street Journal reported that Goldman Sachs is mulling whether to launch a new trading business that is focused on bitcoin and other cryptocurrencies. If the firm moves ahead with these plans, it will be the first high-profile Wall Street company to deal directly in the bitcoin trading market.
According to the newspaper, the idea is still in the early stages, and nothing may end up arising from the preparations. However, if Goldman Sachs does enter the bitcoin trading market, the firm is expected to increase cryptocurrencies’ standing with investors, noted the report.
“In response to client interest in digital currencies, we are exploring how best to serve them in this space,” a Goldman spokeswoman told the Wall Street Journal. The report noted that a growing number of institutional investors are trying out into the bitcoin market, and Goldman Sachs hopes to capitalize on that. By being on top of the market, the firm would also benefit from any developments in the industry, noted the report.
While big Wall Street firms have embraced blockchain, the technology that enables cryptocurrency, they have yet to make a big push into cryptocurrency trading. If Goldman does decide to enter the market, it would be a completely different response to growing demand for bitcoin than what came from rival JPMorgan. Its CEO, Jamie Dimon, recently stated during an investor conference in New York that bitcoin “is a fraud,” predicting that the cryptocurrency would implode. “The currency isn’t going to work,” the executive was quoted as saying; “you can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
Dimon also said any JPMorgan traders working with the cryptocurrency would be fired for two reasons: It’s against the company’s rules, and, secondly, Dimon feels it is “stupid.” His comments come as the price of bitcoin has quadrupled since December, at one point flirting with a new high of $5,000.
“Don’t ask me to short it,” Dimon said, according to Reuters. “It could be at $20,000 before this happens, but it will eventually blow up. Honestly, I am just shocked that anyone can’t see it for what it is.”