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The investment bank recognised bitcoin’s potential as a store of value, similar to gold Goldman Sachs will finally launch its widely-rumoured bitcoin trading operation after the investment banking giant succumbed to pressure from clients enthusiastic about cryptocurrency. The move is set to make Goldman Sachs the first major Wall Street bank to open a bitcoin trading desk, however it will only offer a limited numbers of derivatives at first.

The creation of the trading platform, first reported by The New York Times, came after senior figures at Goldman Sachs concluded that bitcoin is not a fraud or simply a speculative bubble. Bitcoin exists without a central bank able to manipulate its value Bitcoin’s technical lead Gavin Andresen The operation, led by the firm’s first ever “digital assets” trader Justin Schmidt, is expected to begin within the next few weeks, though an exact date has not been set.

When it launches, Goldman Sachs will use its own funds to trade bitcoin futures on behalf of clients. “This shouldn’t come as a huge surprise to anyone who has been paying attention to cryptocurrencies over the last 18 months. Any forward-looking financial institution needs to understand this technology and accept its enormous potential,” Matthew Newton, an analyst at cryptocurrency retailer eToro, told The Independent.

“Despite some initial posturing, the reality is most big banks have already invested significant amounts in research and development into blockchain technology, and cryptocurrencies themselves. It will still take time for institutional investors to fully come around  – and the fact that Goldman won’t be buying or selling actual coins suggest some scepticism remains – but there’s a growing acceptance that these assets are here to stay.” The investment bank will likely wait until there is more regulatory certainty surrounding bitcoin and other virtual currencies before it begins directly trading cryptocurrency. Read more from…

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