Wall Street Banks Are Reportedly Backing Away From Cryptocurrency (siliconangle.com) 49
Squeamish from the start about pursuing profits in one of the darker corners of finance, established firms this year slowed their already halting efforts to make a business out of Bitcoin mania. While none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed.
From a report: Multiple leading firms had either announced or were rumored to be entering the market earlier in the year, but few have come to fruition. The report said that "while none has thrown in the towel, and some continue to develop a trading infrastructure, most flinched as the value of virtual coins collapsed." Notable among those firms was Goldman Sachs. In May it was reported that the company was preparing to launch a bitcoin trading desk that would involve the bank using its own money to trade with clients in a variety of contracts linked to the price of bitcoin.
It was presumed that clients would include hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc. in 2017. Fast forward to December and no such bitcoin trading desk has been launched. In September it was reported that the plan had been abandoned, but a day later Goldman Sachs Chief Financial Officer Martin Chavez denied the report, saying that the bank's "exploration of the digital asset class is an ever-evolving process and is in response to significant client interest." He added that the report was "fake news."
It was presumed that clients would include hedge funds that deal in cryptocurrencies as well as bitcoin futures contracts such as those launched by CME Group Inc. and Cboe Global Markets Inc. in 2017. Fast forward to December and no such bitcoin trading desk has been launched. In September it was reported that the plan had been abandoned, but a day later Goldman Sachs Chief Financial Officer Martin Chavez denied the report, saying that the bank's "exploration of the digital asset class is an ever-evolving process and is in response to significant client interest." He added that the report was "fake news."
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1) Make random stuff up
2) Stick it into a random discussion
3) ???
4) Profit!
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"Futures contracts" is the biggest fucking scam I've ever fucking heard of.
Futures contracts help to provide stability, which is something that cryptocurrencies desperately need if they are ever going to be used as money rather than as modern day tulip bulbs.
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"Futures contracts" is the biggest fucking scam I've ever fucking heard of.
Futures contracts help to provide stability, which is something that cryptocurrencies desperately need if they are ever going to be used as money rather than as modern day tulip bulbs.
This. ShanghaiBill, once again I am in the rare position of agreeing with you. Peace out.
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And right at the moment, banks are backing away from ALL investments except possibly Yapese stone disks.
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Oddly bit coins fall is partly why it's safer now (Score:5, Interesting)
Bit coins sudden fall was triggered the day the bit coin futures market opened. No surprise. this allowed people to short bit coin (borrow other people's coins, and sell them, planning to buy them back later). So of course with all those sales in the market the price went down massively. And the herd instinct of Bitcoin faith followed, making a pile for the Short sellers. Further confirming this hypthesis is how the price also miraculously stabilized just about exactly one-short-contract duration later.
THe good news is this, while the futures market did create a way for all the shortsellers to take the slack out an overprices situation, overall it's great news. Futures makets provide hedging insurance as well as price arbitrage. This means much better liquidity and the ability of buy without risk (worried the price will collapse? Buy a short option. Worried the price will go up? sell a short option? )
So ironically, now it is finally safe enough for wall street.
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Re:Oddly bit coins fall is partly why it's safer n (Score:5, Insightful)
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Re:Oddly bit coins fall is partly why it's safer n (Score:5, Insightful)
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Short-selling doesn't help against bubbles. And cheer leaders buying stocks doesn't make the price more invalid, things are worth what people are willing to pay for it. The existance of many Apple fans, means they can charge more for their products, but it doesn't make the price invalid, just a bit overpriced for non-fans. The same applies to stocks. If people are willing to invest it in a company beyond traditional metrics it just make the stocks a worse investment for standard investors, but has nothing
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.. fans protects products against...
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Re: Oddly bit coins fall is partly why it's safer (Score:2)
Overvalued doesn't mean bubble. If the investors overpaying are fans and not just mistaken. The overevalution is unlikely to burst, and thus the overevalution isn't a bubble (a bubble is an overevalution that bursts)
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I work in the tech area of one of the large banks.
We have reviewed it many times.
"what does this thing *DO*"
"It holds money"
"Like a bank account"
"we sorta it holds money in a immutable ledger"
"well the immutable ledger is interesting but we already do that as required by law".
To a bank crypto currency is mildly interesting because it involves money. But who do you think owns the fed? It is not the US gov. It is the large banks.
But make no mistake in what I am saying. The banks will wring every cent out
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The oil was going for the price it was going because of supply and demand. Price collapsed because supply in the world's biggest oil refining and consuming economy shifted dramatically in last decade, shifting the oil trade routes completely. To the point where people who always paid premium before the shift, like East Asians, actually had a discount in the end, and people who had a discount as primary purchasers stopped buying alltogether.
Just because all you have is a hammer, doesn't mean that all problem
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Your understanding of Arbitrage is thin. It comes up up many more contexts than you imagine. For example, when the prices of a security often makes perfect sense for people who have the average level of risk aversion but no sense for people with higher or lower levels of risk aversion. Arbitrage and hedging can take advantage of this difference in desired risk aversion. No one is losing anything. People who are risk averse welcome lower returns in return for lower risk.
Wasn't that the point behind cryptocurrencies? (Score:3)
Bitcoin is dying (Score:4, Insightful)
It is now official. Wallstreet has confirmed: *BTC is dying
One more crippling bombshell hit the already beleaguered *BTC community when Walstreet confirmed that *BTC market share has dropped yet again, now down to less than a fraction of 1 percent of all servers. Coming on the heels of a recent Netcraft survey which plainly states that *BTC has lost more market share, this news serves to reinforce what we've known all along. *BTC is collapsing in complete disarray, as fittingly exemplified by failing dead last [samag.com] in the recent Sys Admin comprehensive networking test...
The red flag (Score:3)
If an entire industry known for doing whatever it takes to fuck over customers wants to go into unregulated territory, anyone who still believes that it will all work out due to some market fairy invisible hand shows themselves to be gullible idiots.
Potential buyers "flinched as the value collapsed" (Score:2)
Uhhhhh... With crappy logic like this, why should I not assume someone paid for this article intending to dissuade other buyers while they load up during the dip?
In other news (Score:1)
A piece of faeces is reportedly backing away from a pooper-scooper.