Bitcoin Forum

Wall Street giants prepare their entry into cryptocurrencies

Original article in French (https://courscryptomonnaies.com/actualite/les-geants-de-wall-street-preparent-leur-entree-dans-les-cryptos)

Translation (apologies for the possible mistake here and there):

At Goldman Sachs
Mark Chavez, Chief Financial Officer of Goldman Sachs, talked about this earlier this month when he confirmed that the investment bank was developing a derivative product for Bitcoin. He also denied the rumor that Goldman Sachs was abandoning his plan to open a crypto exchange office.

Speaking at San Francisco's TechCrunch Disrupt conference, Chavez hinted that to meet a customer's need, the bank was working on "undeliverable futures", which are US dollar derivatives traded on a voluntary basis. over-the-counter (OTC) and whose reference price is the Bitcoin-US dollar price set by a group of exchanges.

The bank says it has done an analysis of the fundamentals of bitcoin before embarking on the cryptos market, namely its market and the behavioral changes of a growing class of investors that Goldman Sachs calls: the Millennials.

For Goldman Sachs, crypto-currencies represent only 0.3% of global GDP, "This is a huge opportunity for any company or conglomerate that can monetize Bitcoin and sell it on Wall Street".


At Citigroup

Citigroup is also preparing to enter the market. The bank has instead chosen to move towards a Digital Asset Receipt (DAR), an instrument that allows investing in Bitcoin and cryptocurrencies without the need to directly own the underlying asset.

For some, Citigroup may have found THE SOLUTION with its DAR to introduce cryptos into the stock market. The DAR, which allows US investors to invest in foreign stocks on regulated markets, acts as a US deposit receipt. This gives Wall Street investors a way to invest in cryptos with less risk.


At NYSE

ICE, the parent company of the NYSE has called on Microsoft, Starbucks and Boston Consulting Group to launch Bakkt, a Bitcoin exchange scheduled for launch in November, subject to regulatory approval. Jeffrey Sprecher, founder and CEO of ICE said: "By bringing a connected and regulated infrastructure, as well as institutional and consumer applications for digital assets, we aim to build confidence in the global asset class, consistent with our experience of transparency and trust, in previously unregulated markets ".

Bakkt will offer investors one-day futures on Bitcoin. The agreements guarantee buyers that they will receive physical Bitcoin at the end of the contract one day later at the set price.


At Morgan Stanley

Morgan Stanley is the last to join the party. The bank is already technically ready to offer its Bitcoin swap, Bloomberg said, and will launch its Bitcoin swap for institutional investors once the internal approval process is complete.

The Wall Street giants are trying to find the best ways to "monetize" Bitcoin and crypto-currencies. They want to achieve the same principles that pushed bankers and wealthy individuals to take advantage of their money, that is, generate a lot of passive income by minimizing risk as much as possible.


It is easy to understand that in the Wall Street world, the technological revolution and the values ​​which are attached to it are only secondary: profit is the most important.

The traders profiles present in the crypto world certainly see the arrival of Wall Street as a boon to boost the market at the expense of the true values ​​that carry the blockchain and crypto-currencies, that is to say the decentralization.

There are definitely prospects of large institutional investors entering, even though the bear market is still present.

And we've already seen in fact a lot of them express their interest or launch plans to form investment products. However, we're actually yet to see any of them release major investment packages, including the trading desk idea of Goldman's which they backed out of.

It's important to note though that these institutional investors are likely going to be speculating on bitcoin price rather than doing anything to practically help the bitcoin network, which is reason to not get too excited for their entry.

There are really a lot of incentives for those Wall Street giant to enter the market. They know that crypto at this point is going to unstoppable and I speculate that some of their investors are clamoring to those financial giants to at least give crypto a go and see how it pans out. They are being pressured and soon we will them getting their acts together and joining the bandwagon. Afterall, there are billions of money flowing around, it makes sense for them to get a piece of that pie. But at the end of the day, everyone is here to make money so I'm pretty sure there's a big influx of cash coming in, but the question remains, how big those institutional money and how can they affect the market, can be price be sustainable at the long run or they will just speculate and milk the system up to the last drop.

I wouldn´t be so sure about this. The influx of new money has really dried up and is not comparable to
2017. It is entirely possible that we will see a prolonged bear market, which would drive many investors
away as they are looking for profits elsewhere. Crypto was of course the most promising investment of
2017, but without any catalysts for another bull run I fail to see why investors would start to pour
billions into cryptocurrencies now.