Bitcoin is getting a big boost…from Goldman Sachs (GS).
The financial juggernaut and China’s IDG Capital Partners are investing $50 million in Circle Internet Financial, a start-up that provides services to help consumers use the virtual currency. Goldman is the first major Wall Street bank to make such a big bet on bitcoin.
But as Yahoo Finance Technology Reporter Aaron Pressman points out, Goldman isn’t interested in speculating in bitcoins. It’s focusing on how bitcoin operates.
“The technology behind the scenes that enables bitcoin to work, that’s something that venture capitalists and a lot of banks have been looking at,” he says. “And maybe really will be what comes out of this.”
Yahoo Finance’s Aaron Task believes Goldman is just trying to stay one step ahead of the competition.
“Everybody around Wall Street is looking at bitcoin and trying to figure out whether they’re going to wait for the regulations or try to get ahead of the regulations and dip their toe in the water,” he explains. “And that’s what Goldman is doing.”
Task adds Goldman likely feels more and more of us will be using the virtual currency in the future…and wants to get on that bandwagon now.
There’s going to be a greater adoption of bitcoin use as a method of payment,” he says. “I think that’s its promise…and what Goldman is betting on here.”
Task believes Goldman sees bitcoin as being an attractive consumer electronic money alternative.
“Apple Pay (AAPL) doesn’t do anything for me as a consumer,” he argues. “But if I can transfer bitcoins to somebody else around the world and pay for goods and services, I think they want to be part of that process.”
And Yahoo Finance’s Jen Rogers says having Goldman associated with bitcoin is a pretty important milestone for the virtual currency.
“It does seem to add legitimacy because it’s such a big name,” she notes.
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