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Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

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Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#81

Post by cm2187 »

vkou wrote: post #74
cm2187 wrote: post #62

Earlier quoted context omitted.

They got burned by doing the same with subprimes, selling securities to clients who requested them but in which they did not believe themselves (and were shorting at the same time). This sort of move carries a significant reputation risk. I am sure not everyone at GS believes in crypto-currencies, there must be a lot of internal emails in the style "this is a pyramid scheme", "this thing will crash", etc... Reminds m…

That's not quite correct. The problem with subprimes was that banks were issuing questionable loans, and then selling them to investors (Without telling them that the loans weren't worth the paper they were printed on.) This carries a significant reputation risk because they were, quite literally, defrauding their customers. A crypto trading desk, on the other hand, just lets them buy or sell crypto on a customer's b…

Investors buying subprimes were professional investors. Most of them didn't like subprimes but were buying them because that was the only way to pick up a little bit of yield in a market where credit spreads were massively compressed. It's after they lost their shirt that they suddenly pretended having never realized that subprime stood for loans to riskier borrowers.

This is not very dissimilar. I am certain the majority of investors who will buy bitcoin did not do their due diligence in term of how the currency works (in fact I see a lot of pretty financially switched on people around me who seem quite confused on how it works). They buy now because they want the return and will complain that they weren't aware of the risks when they lost their shirt.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#82

Post by vkou »

ryanwaggoner wrote: post #77
notyourday wrote: post #17

Earlier quoted context omitted.

BTC market size is the $$/Yen/GBP/Euros exchanged into BTC a day and backwards, not Max(SomeOnePaidForBtc) * BTCs outstanding.

Interesting. Why is it this and not daily volume?

I trade you my dog for your cat. We both say that they are worth a million dollars.

What is the market cap of our two-animal store-of-value ecosystem?

(Unless you're an economist, the answer is not "Two million dollars.")

On the other hand, if I then went ahead and sold your cat to some outside party for $600, and you sold my dog for $400, we could reasonably say that the market cap is ~$1000.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#83

Post by bsaul »

nullbyte wrote: post #38
tootie wrote: post #22

Earlier quoted context omitted.

Isn't it mostly being manipulated by drug traffickers and money launderers right now?

Wow, you're behind the curve, aren't you.

Hm, what are bitcoins used for today ? I was still seriously under the impression that there still wasn’t any serious use, except for illegal activities... ( i’m not talking about eth which found an interesting usages with ICOs, just bitcoins).

Edit : i’m also not asking for the list of legal shops that accept bitcoins, i’m wondering about the percentage of officialy legal bitcoin transactions vs the rest.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#85

Post by aviv »

nullbyte wrote: post #31
pmc1 wrote: post #23

My best guess is that the "store-of-value that can't be manipulated by banks" is effectively over. Big banks it seems will take over the trading volume of the big crypto coins and develop their own exchanges.

They may be able to partially manipulate the price, but they can't influence the currency or money supply. That's the beauty of crypto.

Doesn't matter one single bit. Goldman Sachs can't mine gold and control its physical supply, but they sure can play with its market price. So they can drive down the futures price and then hoard physical bullion on the cheap if they have a large institution or country wanting to accumulate gold reserves. Rinse, repeat. Finance 101.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#86

Post by twohearted »

AnimalMuppet wrote: post #65
nullbyte wrote: post #31

Earlier quoted context omitted.

They may be able to partially manipulate the price, but they can't influence the currency or money supply. That's the beauty of crypto.

If they can't influence the money supply, but can influence its price, what difference does it make?

If you consider BTC to be the stable currency then it is USD that is crashing.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#87

Post by vkou »

pmc1 wrote: post #23

My best guess is that the "store-of-value that can't be manipulated by banks" is effectively over. Big banks it seems will take over the trading volume of the big crypto coins and develop their own exchanges.

Right now, this store-of-value is being manipulated by whales and exchanges. Bitfinex has allowed illegal wash trading for months, there is evidence that points to insider trading on Coinbase, it's entirely possible that exchanges have been front-running their customers...

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#90

Post by m777z »

junkscience2017 wrote: post #53
tootie wrote: post #29

Can someone explain this collective mania to me? This is all 100% pure speculative frenzy, right?

amateurs like Coinbase might speculate, but pros like GS use the Federal Reserve as their backstop its one of those "heads I win, tails you lose" scenarios...GS will keep the profits but if things go south, their losses can just be taken out of your local school budget

Explain for those not in the know, like me. I thought Goldman repaid their TARP bailout money?
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