American financial giant Goldman Sachs is jumping on the cryptocurrency band wagon by trading Bitcoin futures.
The bank has said rather than trade in Bitcoin directly, the futures will be backed by the bank’s own cash.
The aim, says the bank, is to move into direct trading if regulatory approval is granted.
Executive Rana Yared is one of the team setting up Bitcoin trading for the bank.
She says: “I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world. For almost every person involved, there has been personal skepticism brought to the table.”
Yared also explained the bank is clear about the risks Bitcoin trading represents – not least market manipulation through unregulated exchanges.
“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value,'” she said.
“It is not a new risk that we don’t understand. It is just a heightened risk that we need to be extra aware of here.”
Goldman Sachs will start their Bitcoin operation within a few weeks.
Not all banks hold such favourable views about cryptocurrency. Jamie Dimmon, CEO of Goldman Sachs competitor JP Morgan Chase has called Bitcoin a fraud.
“The blockchain is real but if you are stupid enough to buy Bitcoin, you’ll pay the price one day,” he said.
Bitcoin prices are more stable and rising after a volatile start to the year – the price has gone up $508 in the past three months but stands well below last December’s high of almost $20,000.
Here are the latest trading prices from cryptocurrency tracker cryptocompare.com.
|A week ago||$9,362.81||$677.41||$152.66||$0.85||$490.58|
|One month ago||$6,891.85||$374.38||$117.01||$0.49||$312.55|
|Three months ago||$9,251.27||$970.87||$161.00||$0.95||$636.41|
|A year ago||$1,516.76||$90.79||$25.20||$0.08||$86.45|
|High in year||$19,065.71||$1,385.02||$319.57||$2.78||$1,433.41|
|Low in year||$1,516.76||$85.15||$22.83||$0.08||$86.45|
|Market cap this week (billions)||$166.28||$79.79||$9.29||$35.23||$4.04|
|Market cap last week (billions)||$153.70||$62.70||$8.31||$31.50||–|
|Market cap change in week (billions)||$12.58||$17.09||$0.98||$3.73||–|