Sturm bitcoin news

Bitcoin is coming to Wall Street sturm bitcoin news Sunday, and some executives at the world’s biggest banks aren’t sleeping well. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. What are you searching for?

In interviews, some executives and traders said their desks are eager to get in on the action — but most sounded cautionary notes, ticking off concerns and unanswered questions. Bitcoin’s violent price swings this week have made the new market look all the more dangerous. All of the people — speaking from a half-dozen major firms — asked not to be named, in some cases saying they’re worried about contradicting their bosses’ public statements. Others said it’s still too early to take a position.

Now, what will it look like if firms help clients into investments that blow up? How might internal commentary over the futures sound if it ever spills into legal cases? Enthusiasts say bitcoin is a currency. The Commodity Futures Trading Commission says it’s a commodity. So it may seem natural for trading desks in those markets to handle the new contracts. Bitcoin is like a volatile stock, and futures, at least in some ways, are like the options that track it. When asset prices are steady, it’s relatively straightforward for banks to make markets: Help a customer buy or sell an asset, and then take some time to find another client who wants to take an opposite position.

But bitcoin is too radioactive for banks to hold — it swings wildly within minutes and there’s no established model to account for it on the balance sheet. So banks will try to clear the new contracts, matching one investor with another. A few traders, for example, said many clients are only interested in shorting. That can make for a pretty hard day at the office: Without longs, the trades may be costly and hard to set up.

The trade group, made up of some of the world’s largest derivatives brokerages, said it was concerned that the cryptocurrency’s extreme volatility could lead investors to default if prices swing. That could sting firms that clear the contracts. It’s going to be tough for big bureaucratic banks to figure out all of these mechanics — and their own stomach for the business — on a tight schedule. A person close to Goldman Sachs said on Thursday it will initially clear bitcoin contracts for certain clients on a case-by-case basis. Dutch lender ABN Amro Group NV said it will clear the futures for some clients who request specific approval, and said it has received fewer than 10 requests so far. At some other firms, executives said they may enter when ready. So if they do choose to wade in, it’ll be smooth.

But will a small presence from big players give an advantage to nimbler, risk-friendly firms that embrace the new market out of the gate? Before it’s here, it’s on the Bloomberg Terminal. Have a confidential news tip? Get in touch with our reporters.

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