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Goldman Sachs CEO Blankfein to Step Down, Bestowing Complex Bitcoin Relationship
Lloyd Blankfein, 63, is expected to step down as CEO of Goldman Sachs in December, leaving the bank’s future uncertain in several ways, including its relationship with bitcoin.
The New York Times reported that Blankfein will likely depart following the company’s December annual dinner for retired partners. While the bank earlier this month announced plans for a bitcoin trading desk and a futures contract tied to bitcoin, its embrace of bitcoin has been undermined by Blankfein’s stated doubts.
Blankfein’s Doubts
In late November, he called bitcoin a tool for fraud when its price reached $10,000, amidst reports the company was exploring a cryptocurrency trading desk. He denied the company had a bitcoin strategy and said the cryptocurrency’s volatility made it a bad store of value. If it stops fluctuating 20% in a day, he said he’d reconsider.
Blankfein had said previously he was “open” to bitcoin and that he would not allow his own opinions to impact the company’s strategy.
In early November, he said bitcoin could prove to be the “next step” in money’s evolution. While he was uncomfortable with bitcoin, he said he felt the same skepticism with cell phones when he first encountered them.
Over the years, he noted, he has learned a lot of things work out that he does not love. He went as far as to say that in the new world, it is possible a consensual arrangement about value could exist rather than a government fiat. If bitcoin did become mainstream, he said it would be hard money’s natural evolution.
Then in mid-November, he said he didn’t like bitcoin and it could be a bubble.
The future without Blankfein remains unclear.
A Goldman Sachs spokesperson said most people involved in the bitcoin operation are still skeptical about it.
Bank Acknowledges Activity, Cites Uncertainty
The company disclosed in a Feb. 26 filing with the SEC that its cryptocurrency and blockchain related investments and its intention to support clients’ bitcoin futures trades could hurt the company should there be issues with blockchain protocols.
Bitcoin, however, is only one of many uncertainties the bank faces going forward.
Its mergers and acquisitions advising is far less profitable than before the financial crisis, The New York Times reported, and consumer and investment banking aren’t large enough to make up the difference.
The bank has since bolstered its investment banking into mid-size cities and expanded its online lending and currencies and commodities trading for big corporations.
Featured image from Flickr.
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