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Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

bloomberg.com

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Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#161

Post by notyourday »

cm2187 wrote: post #94
aslkdjaslkdj wrote: post #92

Earlier quoted context omitted.

A simple trading desk does not create the kind risk that caused the financial crisis. The nature of the CDS/MBS contracts the bank owned in their name caused the counter-party risk. Buying and selling bitcoin on behalf of customers does not come with anywhere near the amount of risk as signing a CDS that says Goldman owes a pile money money if AIG defaults.

The problem isn't counterparty risk. The risk to GS is the reputation risk. Investors losing money = investors suing. Selling products that you don't believe in yourself = testifying in front of a bunch of angry senators waiving internals emails about "shitty securities" at you.

GSCO is not doing this for retail clients.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#162

Post by user5994461 »

dmurray wrote: post #136
user5994461 wrote: post #121

Earlier quoted context omitted.

It is illegal and it is tax evasion in some jurisdictions. 1) Transferring your money directly would allow to avoid inheritance tax. 2) Some jurisdictions have hard limits on what you can "donate" to your children. It can be "low" like 100k per 10 years.

No, it becomes tax evasion if you do this and then fail to pay the applicable tax on it. In the same way, it's not tax evasion to have a successful business, say, making a million dollars selling shoes, even though there are limits on how much money you can make selling shoes before you have to pay tax on it. It is tax evasion if you make a million dollars of taxable income and only pay enough tax for half a million.…

It looks like we're both in agreement that there are legal requirements beyond "just transfer all the money to my son".

Point being. When the client ask "transfer the money to my son and close my account", he usually doesn't mean "take 30% off, transfer what's left to my son and close the account".

You can have a look at France. I am not sure what paperwork is needed to make it legitimately, it's non trivial.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#163

Post by r00fus »

cm2187 wrote: post #62
headmelted wrote: post #26

Earlier quoted context omitted.

Mostly I think it's 1. A lot of people jump on guys like Jamie Dimon and Lloyd Blankfein for calling Bitcoin massively volatile / a bubble / whatever, like they hate cryptocurrencies. They don't care, and they aren't supposed to. Their business is to sell whatever the customer wants to buy, cheaper or easier than they can get it elsewhere - and right now the customer wants to buy Bitcoin. Who cares if the backside fa…

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…

> They got burned by doing the same with subprimes

I really doubt getting bailed out should be called "burned". More like they realized they could get away with murder.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#164

Post by nhooyr »

jonpo wrote: post #56
aviv wrote: post #11

So much for the promised currency / store-of-value that can't be manipulated by banks / governments.

"Chancellor on brink of second bailout"...The animals, watching through the window, realize with a start that, as they look around the room of the farmhouse, they can no longer distinguish which of the cardplayers are pigs and which are human beings.

Read that book for the first time this year. Loved it :)

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#165

Post by indescions_2017 »

victor106 wrote: post #7

They typically do this for a few reasons: 1. High net worth clients demanding such products. 2. Obvious FOMO. 3. In case this crypto thing becomes big they don’t want to be criticized. 4. All companies are seeing a nice bump in their share prices with any association to crypto

Also. This past year to date has evinced all time historical low volatility in major currency crosses. Difficult to make the case based on sheer volume that fiat is being abandoned for crypto. But players hunting for alpha tend to go where the action is:

Traders Lament Death of FX Volatility as Torpor Tanks Returns

https://www.bloomberg.com/news/articles/2017-12-10/traders-l...

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#166

Post by mulmen »

wslh wrote: post #150

I am also thinking about building a cryptocurrency trading desk inside my company, any thoughts about how to recruit in this field? I am mainly finding it difficult to get the right personality traits since there are a lot of shady and non-professional people.

I honestly can't tell if this is a serious comment.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#167

Post by MadSudaca »

aviv wrote: post #85
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.

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.

Also, bitcoin as it stands right now is pretty useless compared to other cryptocurrencies. The value of bitcoin long-term is tied to the core team's ability to make the necessary changes to the protocol and to do it fast before another currency overtakes the lead of the cryptosphere. This is not gold, this is a world of software that changes and evolves constantly. The bubble for bitcoin might burst soon, but other coins that provide actual value will take its place.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#168

Post by asenna »

What's with all the extreme negativity with Bitcoin and its trading price on HN? I've been noticing that in all the BTC related threads recently.

Yes, this is possibly getting too large too fast. Yes there is a chance this is a bubble because the barbers and shoeshine boys are talking about it. But there is also a chance that we genuinely are at the beginning of the transition from Fiat currencies to crypto (beginning of the S-curve mass adoption). And given that we live in the digital connected age dealing with a virtual concept, it takes a lot less time for things to catch on and spread like wild fire, as opposed to other transitions in history like snail mail -> Email (which also was not that slow).

And if at all that crypto vision does come true, the value of BTC and some of these other top cryptos would be worth a _lot_ more than it is right now.

Again, this could go the other way and it could all come crashing down soon and maybe the hype dies down. But I feel a majority of the HN community is just waiting for that to happen which I did not expect.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#169

Post by mulmen »

etr-strike wrote: post #149
tootie wrote: post #29

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

Most of us Bitcoiners are skeptical of modern monetary policy and want a risk-free store of value for our wealth. Today Bitcoin is very risky, however, we believe its fundamental properties will ultimately lead to a stable place to put our savings. Sure, it won't gain interest or dividends but it also won't be subject to inflation or central banker manipulation. The above is purely my opinion and is frequently the su…

If Bitcoin is not inherently stable why do you think it will become stable in the future? Do you believe it is subject to manipulation by parties other than central bankers? I don't understand this line of thinking but I am not an expert so I am curious to hear your perspective.

Re: Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk

#170

Post by phil21 »

cm2187 wrote: post #99
vkou wrote: post #91

Earlier quoted context omitted.

> 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. There's certainly more due diligence that they…

Credit ratings are merely an opinion. You can't call fraud if someone is wrong on an opinion on whether some securities will go up or down (otherwise you would jail 90% of research analysts). In this case their rating was based on the assumption that there wouldn't be a US-wide real estate downturn. That was backed by a long history and turned out to be dead wrong. I am sure there was fraud as well. But fraud doesn't…

> But fraud doesn't explain the financial crisis.

Fraud is the only thing that caused the financial crisis. Period.

Fraud from the top on through the bottom. The guy lying about his income to the mortgage broker who knew the dude was lying (and likely told him how to do it effectively), to the ratings agencies lying, to the wall street banks lying, to robosigning, etc. etc. etc. It was outright fraud every step of the way and almost no one who participated in that market has clean hands.

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