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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

#151

Post by etr-strike »

m777z wrote: post #90
junkscience2017 wrote: post #53

Earlier quoted context omitted.

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?

The TARP money was just a small fraction of the actual bailout. The Federal Reserve also drove the interest rate on your savings account below the rate of inflation (robbing you of your wealth). Artificially suppressing interest rates also propped up asset prices -- assets such as houses which all the banks own. TARP was the tip of the iceberg.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#152

Post by kingmanaz »

coldcode wrote: post #84

At the barbers today they were all talking about having bought bitcoin recently. When barbers start trading in bitcoin its probably the peak. In 1929 some people started getting out when the shoeshine boys started giving tips.

In times of Weimar prosperity, more people should curl up with a copy of Ben Graham's '29-crash postmortem "Intelligent Investor", IMHO. I can't help but suspect that these barbershop customers will someday regret not having simply parked half of their savings in AAA-rated government bonds, the other in consumer defensive dividend champion stocks, and rebalanced once a year. More power to them if they strike it rich, though.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#154

Post by Simon_says »

batmenace wrote: post #142
pishpash wrote: post #110

Earlier quoted context omitted.

It makes sense from his perspective, yolo, plus it might be his son's inheritance anyway so what does the 80-year-old care?

Well I wouldn't be thrilled on losing my life-savings, no matter what age.

YOLO!

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#155

Post by notyourday »

sosuke wrote: post #146
notyourday wrote: post #15

Earlier quoted context omitted.

It won't. GSCO will price counter-party risk into the spread. If GSCO is serious its coders will write code to run against crypto-APIs at the speed unseen by the "My exchange run on Rails" crowd.

At least in this case you and I can have access to the same APIs that GSCO gets access too unlike the stock market.

You can get access to the same trading APIs GSCO has access to. It does not require much either - the biggest difference between you, me, Jenny from the Block and GSCO is that they can carry much higher risk and provide much higher liquidity and access to exotic markets. Exotic markets are not liquid, so they are not really interesting.

If trading is not your primary business, you really do not want to do API trades.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#156

Post by monochromatic »

coldcode wrote: post #84

At the barbers today they were all talking about having bought bitcoin recently. When barbers start trading in bitcoin its probably the peak. In 1929 some people started getting out when the shoeshine boys started giving tips.

My mom mentioned that she’d heard of bitcoin yesterday. I’m pretty sure that is also a sign.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#157

Post by user5994461 »

germanier wrote: post #148
user5994461 wrote: post #123

Earlier quoted context omitted.

You're wrong on so many levels. Try writing a 100k check to someone and bank it, you'll understand that the world doesn't work like that.

I don't know about checks (we don't really use them here in Germany) but I see many 100k bank transfers and that's an absolutely routine thing to do, even across national borders (but you might need to file some anti-money-laundering and statistical documentation). I would be really surprised if you couldn't transfer 100k (or 1M or 100M) anywhere. Sure, the recipient might need to pay taxes on that.

Yes, the bank can freeze the funds and request the recipient to justify where it came from, that's my point.

For international transfers, I've seen some getting cancelled without notification, the money is just sent back. It's weird.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#158

Post by Pyxl101 »

frgtpsswrdlame wrote: post #138
charlesdm wrote: post #76

Earlier quoted context omitted.

I don't disagree with that, but by that definition, no investor should be taking any above average risk. I think being aggressive with a few percentage points of your portfolio on "long shots" or high risk stuff is not necessarily bad. We have no idea how far cryptocurrencies will run. There will be corrections along the way, but if it actually is a major bubble it might very well run up to $10tn in market cap before…

>We have no idea how far cryptocurrencies will run. There will be corrections along the way, but if it actually is a major bubble it might very well run up to $10tn in market cap before we see a major correction. Come on man... That number is straight from your ass. >I don't disagree with that, but by that definition, no investor should be taking any above average risk. I think being aggressive with a few percentage…

> It's like a currency in that respect, it's only worth what people think it is with no underlying fundamental.

This is my biggest concern with Bitcoin right now. There doesn't seem to be any rational way to justify or explain its price.

How would someone go about making the argument that Bitcoin is over or undervalued at $10, or $100, or $100K? What's the justification?

Even currencies have far more fundamentals. Currencies at least represent faith in the governments that issue them, and those governments' ability to pay treasury bonds and manage inflation. I have never heard a good explanation for what the price of Bitcoin should be in terms of USD.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#159

Post by notyourday »

cm2187 wrote: post #81
vkou wrote: post #74

Earlier quoted context omitted.

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 maj…

Goldman did not get burned on subprime. They got burned on self-underwriting synthetic contracts and listening to MBAs rather than quants to justify not hedging them. If you have not watched "The Big Short" you should watch it.

This move by Goldman is based on learning. They will trade against the clients. Except they would hedge it.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#160

Post by mulmen »

fitchjo wrote: post #54
52-6F-62 wrote: post #37

Earlier quoted context omitted.

Don't forget Jamie Dimon's company is founding their own blockchain for transactions, Quorum. https://www.jpmorgan.com/global/Quorum

Finding a use for the underlying technology supporting bitcoin is very different than saying bitcoin as a fiat currency is worth the value at which it is currently trading.

I'm not a financial expert but I thought the value proposition of Bitcoin is that it is not a fiat currency.
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