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Barclays Is Sounding Out Clients about Trading Cryptocurrency

In a way to ascertain the interest of clients on the British bank, Barclays started a cryptocurrency trading desk, following the footsteps of Goldman Sachs Group Inc. in closing new business on Wall Street.

According to people who sought anonymity because the information has not been publicized, Barclays Plc has done an initial assessment of both demand and feasibility. However, the bank on Monday said it had no plans to roll out such an operation.

“We are currently constantly monitoring developments in the digital currency industry and having dialogs with our clients on their needs and objectives in this market,” said Andrew Smith, the spokesman, in an emailed statement.

To start a cryptocurrency trading desk, it requires the approval of two significant people; Tim Throsby, the investments bank boss, and Jes Staley, the CEO considering the class, risk and compliance requirements.

In a strategy to revive earnings, Staley allowed the transfer of billions of dollars of capital to higher risk trading activities originating from vanilla corporate lending. Bitcoin rose to a high of $19,000 in December before halving its value within the first four months, making it fit for the bill.

According to Autonomous Research, the number of hedge funds related to cryptocurrency reached 226 by mid-February, from a low of 37 at the beginning of 2017.

Infectious Disease

Goldman Sachs is starting a trading desk to create a market in digital currencies like Bitcoin with the anticipation of running by late June or even earlier, said people with the knowledge in December.

Over the past week, a team of analysts led by Joseph Abate created a pricing model for Bitcoin that was not bullish, viewing it as a disease and predicting its probably on the decline.

The model grouped the pool of potential investors into three, i.e., infected, susceptible and immune. According to analysts, the rise of prices “infectious” spread by word of mouth.  However, at a certain point, the number of potential hosts will be used up, causing prices to flatten before falling.  

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