One in five finance firms is thinking about trading cryptocurrencies in the next 12 months, according to a new survey by Thomson Reuters.
The survey asked 400 clients across Reuters, ranging from hedge funds, trading desks at the biggest banks, and large asset managers. It also found that a majority – 70 percent – are planning to begin trading cryptocurrencies within the next three to six months, reports Reuters. A few of the currencies they are considering include bitcoin, ethereum, and ripple.
Interest in the digital currency market saw a surge last year, which pushed the price of bitcoin to within touching distance of $20,000 for the first time. Along with the launch of bitcoin futures contracts from Chicago-based exchanges CME and Cboe, retail interest exploded. This is despite warnings from global authorities, such as the U.S. Securities and Exchange Commission (SEC), regarding the risks associated with trading in cryptocurrencies.
Even though the price of bitcoin – among other currency prices – has dropped since then, interest still remains. At the time of publishing, the number one digital currency is trading at $9,289, according to CoinMarketCap, representing a 4.36 percent rise in the past 24 hours. This up surge in value follows several months of price declines that saw bitcoin experiencing the worst first quarter of 2018.
Investors, however, remain bullish on market conditions. Earlier this month, it was reported that some analysts are of the opinion that the industry will undergo further maturity this year as volatility decreases. Not only that, but with increased regulation in place, market manipulation will be reduced, which, in turn, will attract large funds who will become more confident at committing significant capital.
Banks are continually showing their interest in cryptocurrencies, one of which is Goldman Sachs. Yesterday, it was reported that the Wall Street bank had hired its first digital currency trader aimed at helping clients to invest in cryptocurrencies.
Justin Schmidt, a former trader, has been hired as vice president and head of digital asset markets in Goldman’s securities division, reports Tearsheet. Since December, reports have suggested that the bank was considering steps to step up a trading desk dealing with cryptocurrencies. It was aiming to do this by the this summer, at the latest. Seen as a financial establishment that is ahead of its peers, Goldman Sachs is making progress in getting the team it wants together to help clients interested in digital currency trading.
Neill Penney, co-head of trading at Thomson Reuters, said:
Cryptocurrency is still a relatively small part of the trading market, but this survey makes clear this niche segment is starting to enter the mainstream of the financial services industry. This is a major change from a year ago.
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