Goldman Sachs is seeking regulatory approval to be the first major player on Wall Street to buy and sell bitcoin, according to The New York Times.
The firm's bitcoin operation will first use its own money to trade with clients on contracts linked to the price of the cryptocurrency before it receives the necessary regulatory clearances to trade. In addition to these futures, Goldman will also create a more flexible futures option known as non-deliverable forwards. The move comes as a growing number of hedge funds, endowments and other major investors have expressed interest to Goldman in holding bitcoin.
The establishment of a dedicated bitcoin trading unit, overseen by Goldman Securities Division Managing Director Rana Yared and led by Goldman Vice President of Digital Asset Markets Justin Schmidt, goes against many established Wall Street opinions on the cryptocurrency. However, even Ms. Yared said her team is entering the market with some trepidation.
"I would not describe myself as a true believer who wakes up thinking bitcoin will take over the world," Ms. Yared told NYT. "For almost every person involved, there has been personal skepticism brought to the table."
Goldman has already been clearing trades for customers on the Chicago Mercantile Exchange and the Chicago Board Options who want to trade bitcoin futures. Though the price of Bitcoin is volatile and set on unregulated foreign exchanges, Ms. Yared is aware of the unique risks related to the cryptocurrency.
"It is not a new risk that we don't understand," Ms. Yared told NYT. "It is just a heightened risk that we need to be extra aware of here."
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