Why is Goldman Sachs getting into the game of Cryptocurrency? Well, it appears that the bank may be considering putting their money into this sector due to potential future gains. A number of financial institutions including; Wells Fargo, Morgan Stanley, Merrill Lynch, Credit Suisse First Boston and Goldman Sachs have shown interest in putting their money into Cryptocurrency ETF’s over the past several months. If the trend continues, then we may see more institutional involvement as the year progresses. Let us take a closer look at some of the areas where this may be applicable in our mutual fund and goldenseurbon portfolio analysis.
According to the press release from Goldman Sachs, the company will be working with the Global Forex Partnership to develop a new cryptotechnology product. This is part of the bank’s effort to get into the innovative technologies that are making waves in the investment world. According to the release, Goldman Sachs’ new product is expected to offer “unprecedented real-time market information.” Among the many advantages of the goldman sachs crypto product is that it will provide market participants with ” unprecedented access to real-time market information.”
In the last few years there has been significant volatility in the price of gold and other precious metals. The news has been full of stories concerning governments banning the circulation of digital currencies such as the EUR/USD, the USD/JPY, and the GBP/CHF. These news stories are causing investors to hold onto their gold for just in case the situation improves. This has caused a run up in the price of gold, which has reached an all time high. In the past, liquidity providers would have had to get in behind the curve and purchase large amounts of gold in order to provide liquidity to these investors so that they could invest in this volatile market.
With the development of the Goldman Sachs Crypto Currency Trading Desk, however, the liquidity providers are in the driver’s seat. According to the news, “The partnership also provides significant new trading opportunities to clients across global markets.” In other words, instead of the liquidity providers having to purchase gold from mining companies or gold futures trading desks, they can now be in line with the leading firms on the trading desk. In addition, the partnership will allow firms that do not trade in gold to begin investing alongside the Goldman Sachs team.
The news was released in conjunction with a paper that was presented at the latest International Association of Cryptocurrency Investors Annual Convention. This paper was written by Jon Claypool and David Funk. In their research, the pair came across several problems that threatened to derail the growth of the cryptocurrencys industry. One issue was the lack of standardization across the board. Another was the volatility of market prices. Finally, investors did not feel that there was sufficient liquidity to sustain a trading team that was led by one firm.
However, in the end, the news proved to be good for the industry. In fact, the Goldman Sachs Crypto Currency Trading Desk will be expanding to include additional trading platforms. Moreover, it was noted that the partnership would allow investors more access to the programs and services offered by the Goldman Sachs platform.
According to analysts, this is only the beginning for the Goldman Sachs partnership. While it is evident that the news will benefit the future of the cryptocurrency industry, it is equally hard to say how the changes will affect the present. Since the news indicated that the partnership would help pave the way for a more uniform execution across the various platforms used by brokers and traders, many experts are predicting a future where one firm controls the major part of the market, leaving the other firms in the peripheral. For now, it looks as if the news could have a limited effect on the overall performance of the decentralised model promoted by the bitcoin. On the contrary, some are saying that it could put a stop to the rise of the price of the digital currency.
It is difficult to make predictions with anything as volatile and controversial as the volatility of the digital currency. Nevertheless, it is safe to say that the impact of the news will largely depend on how the general public reacts. A lot of people may invest in the purchase of the new coins as long as they see the advantage it could bring to their portfolio. On the other hand, others will hold off and wait for the proper time to invest in the traditional way.