Last week, Goldman Sachs (GS) made its intention clear that it’s planning to open a bitcoin trading desk. Goldman is the first bank from Wall Street to dabble into the volatile, unregulated, tainted world of virtual currencies. The bank has also stated it would be using its own money to trade with customers, who had bitcoin contracts. Initially, it is not planning to buy and sell bitcoins on its own until regulatory and other related risks are addressed. With finance powerhouses of Wall Street joining the crypto bandwagon, it’s still not clear how the regulators are going to take it forward.
There are divergent views emanating from the industry relating to bitcoins. When asked about bitcoins, Warren Buffett dubbed it as “rat poison squared” and added that one can buy them, “but it will never produce anything of value.” Buffett’s confidant Charlie Munger has been also bearish on bitcoins, replying in his style, “it’s just dementia.” In a recent interview, Bill Gates seconded Buffett’s view on digital currencies, stating it as “fool theory type of investment”. Gates also added that he would like to short bitcoins.
It’s still not clear how things are going to pan out in the near future. This year we can expect more clarity from regulators on how they are going to tackle digital currencies as Wall Street firms have started turning their attention to cryptos.