Lionel Laurent, Columnist

Wall Street Learns to Dance Bitcoin's Tune

Pressure from clients and competitors is trumping understandable reticence.

November 1, 2017 at 7:38 AM UTC

Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes.

Bitcoin Is Leaving Other Digital Coins in the Dust — Photographer: Chris Ratcliffe/Bloomberg

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Wall Street was never supposed to get Bitcoin. Financial institutions are the bogeymen of virtual currencies, starting with the original Bitcoin white paper that outlined a payment method designed to bypass banks. The yin of crypto anonymity runs counter to the yang of financial regulations tracking clients and combating fraud. Just ask virtual currency firms with whom they bank.

Yet here we are. As the currency soars to a record, financial firms' attitudes are softening. On Tuesday, CME Group Inc. said it will start a Bitcoin futures contract. Goldman Sachs Group Inc. is reportedly weighing a trading desk for virtual currencies, while Morgan Stanley's CEO says Bitcoin isn't inherently bad and more than just a fad. At a time when big investment banks are finding regular financial markets hard going, as Gadfly's Stephen Gandel has noted, Bitcoin seems to offer old-school, volatile thrills. Or, as one expert describes it: "Capitalism distilled."