Goldman Sachs announced this week that the bank plans to launch its own Bitcoin trading operations, using the firm’s funds to trade Bitcoin futures contracts for its clients. In addition, Goldman has plans to develop a more flexible product, the non-deliverable forward. On Thursday, Blockchain Capital partner Spencer Bogart said that he expects other banks will follow the Goldman Sachs lead.
In a discussion on CNBC’s Fast Money, Bogart was asked whether Goldman’s decision was really the “big step” that some are claiming it to be. He noted that it is, and that other banks would feel pressure to follow suit:
“Absolutely. It’s definitely a big step. I mean, I don’t think it’s a perfect solution that all of a sudden now just opens the floodgates to the institutionalization of Bitcoin, but I think … first we had the futures contracts roll out, so some robust derivatives products. Now we’re seeing large banks roll out trading desks. I mean, particularly when it’s Goldman Sachs, I’m going to expect other banks will follow as well.
And they’re going to follow not just because it’s Goldman Sachs and that’s what a lot of banks do is follow what Goldman does, but because this market is so large that you can’t ignore it any more.
I mean, I’m sure that most of these banks have heard about the numbers or have seen the numbers that companies like Coinbase and Binance are putting up, and there’s a real risk that some of those companies could overtake some of Wall Street’s biggest banks if they don’t get in the market.”
Bogart suggested that futures contracts are just the beginning for Goldman and other banks. He said that he envisions the banks eventually embracing trading of the actual Bitcoins rather than just products like futures contracts. Bogart also predicted that the coming years will see a big increase in the number of people “buying Bitcoin for the first time.”