Monday, 25 May 2020

Goldman Sachs to launch a Bitcoin Custody Product

Goldman Sachs sees more price pain ahead for BTC, but that’s not stopping it from looking into creating a Bitcoin Custody product.

Insiders reveal it’s only a matter of time before Goldman Sachs manages Bitcoin for its clients. With all the head fakes of Wall Street, it’s a bit ironic many talented folk in Finance are pivoting into the blockchain space such as in crypto funds or blockchain startups.

With the likes of Coinbase and Bakkt, even the best firms of Wall Street, including Goldman Sachs, need to keep up with the times.

Having launched bitcoin futures trading in May, Goldman Sachs is now pondering the launch of a cryptocurrency custody service, according to Bloomberg. Bitcoin Futures, it turns out, was only the beginning.

Goldman joins a host of other Wall Street firms exploring such a product. With J.P. Morgan Chase putting lots of cash into R&D and partnering with the likes of Amazon, how does Goldman Sachs even keep up? Integrating BTC is a must.

Nobody is buying that it’s “undecided” on its cryptocurrency plans. They really have no choice here. Where there’s demand, there has to be a competitive product. The Bakkt news changes everything for a firm like this. Big surprise then on August 6th, 2018, when other sources “with knowledge of the matter” confirmed to Bloomberg that Goldman plans to offer custody for crypto funds.

Crypto funds are all the rage in 2018, and 2019 could be a breakout year for Bitcoin. I’m starting to think a price increase in late 2018 is now wishful thinking. Bakkt is that moment in the history of Bitcoin where the herd starts to move with regards to mainstream integration of cryptocurrencies and digital assets in the future of finance, investing and asset management. It could also mean these firms are ripe to be disrupted by the likes of Amazon and company.

It’s a bit of a joke, so while previously firms such as and including Goldman Sachs have been largely skeptical about cryptos, even warning investors in January that they were “in a bubble,” the company said in May it would start trading bitcoin futures launched by Cboe and CME late last year. Money talks, the consumer wants what it wants.

Even as Bitcoin has declined by 48% in 2018, the market for cryptocurrencies and digital assets as well as blockchain ecosystems, both private and public, are literally just getting started. A custody offering could help legitimize the burgeoning crypto market, which with Bakkt now seems much more probable in 2019.

By Michael K. Spencer

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