Wall Street is in love with cryptocurrency. It’s getting harder for the doubters and no-coiners to pretend Wall Street’s biggest players are planning on bringing cryptocurrency to their clients. Goldman Sachs, Morgan Stanley, Citigroup, and the owner of the NYSE (ICE) are all reportedly gearing up to launch bitcoin products and services for their clients.
Goldman, one of the largest investment banks in the world, gave crypto currencies a major Wall Street boost earlier this month when its chief financial officer, Mark Chavez, confirmed the development of a derivative based on Bitcoin. He denounced reports that helped sink Cryptocurrencies that Goldman was abandoning their plans to open a crypto trading desk “fake news”.
Before making a move towards offering bitcoin products, Goldman has analyzed the fundamentals of Bitcoin, its market potential, and the behavioral changes of a growing class of investors – Millennials. Goldman has also taken note of the emergence of smartphones in mobile banking and mobile payments, and with aggressive moves by up-and-coming companies such as Robinhood, Revolut, and Coinbase, it has realized that they can learn from these companies, all of whom have long-term crypto strategies.
Banking giant Citigroup is also making a move into crypto, according to various reports. Its angle is a digital asset receipt (DAR), an instrument that allows for, perhaps, the most direct way to invest in Bitcoin and cryptocurrencies without having to actually own bitcoin directly.
As Wall Street tries to determine what is the best way to “financialize” and profit off of Bitcoin and cryptocurrencies, it wants to achieve the same principles that have made bankers and other high-net individuals flush with cash: passive income with as little risk as possible.
Morgan stanley is the latest financial giant to jump on the cryptocurrency wagon, according to a source who spoke to Bloomberg. “Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction”. We covered this a few days ago – read more here
The biggest and most aggressive crypto project comes from Intercontinental Exchange (ICE), the owner of the NYSE. As Goldman Sachs reports, cryprocurrencies represent just .3% of the world GDP. That’s a lot of opportunity for any company or conglomerate that can financialize bitcoin and sell it to Wall Street.
ICE has asked partners Microsoft, Starbucks, and Boston Consulting Group to launch Bakkt, a bitcoin exchange that’s scheduled to launch in November, pending regulatory approval.
“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets”, says Jeffrey Sprecher, founder and CEO of ICE.
Bakkt will offer investors one-day Bitcoin futures contracts, something that the CBOE does not offer.
This aggressive plan aligns with industry insiders like Jack Dorsey, CEO of Twitter and Square, who believe Bitcoin can become the currency of the internet.
But while debate about Wall Street’s full throttled entrance into Bitcoin continues, it’s the computer science engineers quietly coding and building these programs like Bakkt and its critical crypto infrastructure to onboard Wall Street and the rest of the world.
Have any comments? Think this is the start of the reversal once big money comes in? Let us know what you think in the comments.
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