Not long ago, we witnessed Goldman Sachs announce their intentions to aid institutional investors in betting on Bitcoin prices. Now, the decision is final, but what does it all mean for the cryptocurrency market?
First of all, it’s imperative to understand that despite the slew of questions and interrogations from foundations, hedge funds, and businesses, Goldman Sachs did open up the digital asset to potential investors, keeping their word. Because of this, they were endorsed by hundreds of Bitcoin millionaires. These events ultimately lead to Goldman Sachs becoming the first regulated financial institution to offer their clients the ability to trade Bitcoin futures using one of their New York desks, as reported by Forbes Magazine.
Although opinions could be divided, overall the move means that the Wall Street giant will essentially help shepherd a vast selection of hungry institutional investors into the trading of Bitcoin. But, this does not mean that the institution will actually trade Bitcoin. Instead, the major bank will trade the digital asset known as Bitcoin for clients using its own funds, all in addition to non-deliverable forward futures.
Naturally, the online community is buzzing with excitement, particularly since a glowing endorsement from such as a huge name such as Goldman Sachs could help the crypto community establish a more trustworthy front for virtual assets. Here, we’re not solely referring to Bitcoin, but to the crypto market as a whole.
How Did We Reach This Point?
The injection of funds into the crypto ecosystem did not happen overnight. But, it did come after eToro senior analyst Mati Greenspan predicted that a wave of interest will soon enter the crypto space.
Digging a bit deeper, he explained how institutional investors were significantly interested in securing Bitcoins while the prices were low, mainly since they missed the boat last year. To further clarify his position, Greenspan went on to explain the following:
“They were trying hard to catch that bull run, and it seems that they did miss the party. But, November was a very interesting time […] because the clients in the Wall Street banks also wanted to get in on that party.”
Right on cue, Goldman Sachs was among the parties who were interested in driving clients to the party, although it is, at the moment, unclear which direction these futures traders will push the market.
“Whether they’re going to go full-on bull or full-on bear we don’t know, but the important thing is that they’re ready to take on and ready to inject new liquidity into this market […] which at least should even things out and stabilize the price,” Greenspan went on to explain.
Where Does BitMEX Fit Into All This?
Although Goldman Sachs did get most of the attention once it entered the Bitcoin futures market, we shouldn’t forget that it was BitMEX who beat them to it. Known as a cryptocurrency derivative exchange, this business is already offering derivative products to retail investors.
In fact, they are doing such as good job that Forbes reported BitMEX has a daily trading volume upwards of $3 million, with an estimated revenue of $83 million in 2017. With over $21 million in revenue in January alone, we can understand why Goldman Sachs felt like it was missing out. Arthur Hayes, BitMEX’s CEO was proud to say that:
“This is the best thing you could ever have. We make more money when the market goes down. We love this volatility.”