Bitcoin Magazine
2018-05-03 16:33:55

Goldman Sachs Plans to Trade Bitcoin Futures Contracts

Goldman Sachs, one of the most well-known investment banking and financial services providers in the world, announced plans to trade bitcoin futures contracts – a Wall Street first. Goldman’s competitors like JP Morgan have so far shunned the risks and volatility associated with trading bitcoin and have yet to make public forays into the space.What Exactly Is Goldman Trading?In the next few weeks, the firm plans to deploy its own capital to buy and sell bitcoin futures contracts and non-deliverable forwards, or futures with greater flexibility, on behalf of their institutional clients. Futures contracts are legally binding agreements that allow purchasers to buy or sell assets at a fixed price at a specified time in the future. Traditionally, futures contracts are used to hedge exposure or to “go long” on an asset if a trader believes price will increase.It is important to note that bitcoin futures enable Goldman to trade on the underlying bitcoin cryptocurrency, without being directly exposed to it. Goldman will not (yet) come directly into contact with the Bitcoin blockchain.Justin Schmidt, Goldman’s first digital asset trader, will handle the firm’s bitcoin trading efforts. As reported by The New York Times, Schmidt is considering trading bitcoin itself, provided Goldman can secure regulatory approval and mitigate the risks associated with holding cryptocurrency.Why Is Goldman Trading Bitcoin?Goldman...