On Thursday, Blockchain Capital’s Spencer Bogart appeared on CNBC’s Fast Money to discuss the significance of yesterday’s news that Goldman Sachs would launch a trading operation for Bitcoin (BTC) futures contracts.
Sceptical as to whether the investment banking giant’s announcement was deserved of being “touted as a big step” – as reflected by rising prices in the cryptoasset market – the CNBC host, Melissa Lee, asked Bogart if he believed “the lack of a trading desk” had previously been considered a major barrier preventing any would-be mass inflow of institutional money into the cryptosphere.
Blockchain Capital partner Spencer Bogart (@CremeDeLaCrypto) comments on Goldman’s plans for a #Bitcoin trading operation and how it could rock the #crypto world pic.twitter.com/ul4ufrzI3o
— CNBC’s Fast Money (@CNBCFastMoney) May 3, 2018
Whilst acknowledging that “absolutely, it’s definitely a big step,” Bogart was hesitant to declare the beginning of an institutional spending spree. Instead, he recommended that we interpret the Goldman Sachs news as confirmation that the cryptoasset space is well and truly on the radars of established financial institutions; citing last December’s introduction of “robust derivatives products” as the lead domino.
This market is so large that you can’t ignore it anymore.”
The research lead at Blockchain Capital – one of the oldest venture investors in the blockchain technology sector – added that most major banks would be highly aware of “the numbers that companies like Coinbase and Binance are putting up.”
Now respectful of the “real risk” that some crypto companies “could overtake…some of Wall Street’s biggest banks,” it’d be remiss of these financial incumbents “if they don’t get in the market,” Bogart suggested.
Fight For Custody
Bogart admitted that the news from Goldman Sachs wasn’t “a perfect solution [that instantly] opens the floodgates to the institutionalization of Bitcoin.”
When asked what then poses as the next big problem preventing a would-be influx of institutional money into cryptoassets, Bogart replied: “custody.”
Indeed, the Bitcoin trading desk launched by Goldman Sachs will deal exclusively with derivate products. When (if) they eventually enable direct trading of Bitcoin, the decision will have been made because of regulatory clarity surrounding custodial obligations having been achieved, according to Bogart.
Progress Report
Acknowledging the fact that custody “became a very well-known problem over the course of 2017,” Bogart told Lee that “probably a dozen credible players in this space” are actively addressing the hampering issue; citing Coinbase and BitGo in particular.
Non-HODLers > HODLers
Despite imminent regulatory pressures, Bogart – ranked #43 by Crypto Weekly’s list of The 100 Most Influential People In Crypto (2018) – remained long-term bullish on Bitcoin.
He justified this by questioning which direction investor capital will flow (i.e., more buyers than sellers, or vice versa). The answer, he believes, is that “there’s going to be way more people” entering the cryptoasset market than there will be ‘HODLers’ selling their positions.
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