Goldman Sachs ramps up bitcoin trading in new partnership with Mike Novogratz’s Galaxy Digital. More from Hugh_Son:
But nothing prevents banks from dealing in financial wagers tied to the price of the underlying coins, and that is where Wall Street is starting its crypto journey. There are parallels in the commodities realm, in which banks trade exposure to hogs or corn without owning the physical asset, he said.with ex-Goldman executives familiar with running regulated businesses — positions itself as a bridge for financial companies and crypto venues.
It's a step toward the vision that Vanderwilt and the other former Goldman executives have for the development of bitcoin's market infrastructure. As more banks allow clients including hedge funds, pensions, family offices and sovereign wealth funds to trade bitcoin, the depth and breadth of the market improves, which ultimately should lower bitcoin's famous volatility, he said.
"You're moving the market participants from being north of 90% retail, a huge chunk of which have access toof leverage, into an institutional community, who have proper, tried-and-tested rules and regulations about leverage, asset-liability mismatch and risk," Vanderwilt said. "The more activity that moves into the institutional community, the less volatility there will be.
Banks will be able to offer clients ways to wager on bitcoin using derivatives, taking a page from the world of established finance, he said. That includes arbitrage bets related to the price gap between CME bitcoin futures and bitcoin itself, relative value trades between bitcoin and ethereum, and the creation of bitcoin structured notes.
Goldman's steps in cryptocurrency trading are happening despite sustained skepticism toward bitcoin from other parts of the firm. Most notably, the bank's
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