Bitcoin, the world’s largest cryptocurrency by market cap – benefitted from a spike of $200 following the news that Goldman Sachs was moving towards introducing a Bitcoin trading operation.

It will be the first crypto trading operation at a Wall Street bank, according to the New York Times, which broke the story.  The report says: “The bank is about to begin using its own money to trade with clients in a variety of contracts linked to the price of Bitcoin.”

Should the bank get approval from the necessary regulators, it would trade progress to full Bitcoin trading, say sources.

It is a development that can be expected to further enhance credibility for digital currencies — and create new concerns for Goldman.

They already clear Bitcoin futures for some clients, as does its main competitor, Morgan Stanley, while other banks like Citi and Bank of America have, to date, not entered the market.

Over the last two years, an increasing number of hedge funds and other large investors around the world have shown interest in cryptocurrencies, such as Bitcoin, Ethereum, Ripple, Litecoin and Dash. Tech companies like Square have begun offering Bitcoin services to their customers, and the commodity exchanges in Chicago started allowing customers to trade Bitcoin futures contracts in December.

Despite becoming more mainstream, cryptocurrencies remain highly volatile. But earlier this week, deVere CEO, Nigel Green, commented: “Cryptocurrency volatility should be treated like any financial market turbulence.

“As with all types of investing, diversification is the investor’s best tool to mitigate potential risks and to take advantage of the opportunities that present themselves in volatile market conditions.

“Cryptocurrency investors should be diversified across the main digital tokens and as part of a wider investment portfolio of assets, sectors and regions.

“Some of the world’s most astute investors have always used market volatility as major buying opportunities in traditional financial markets. By topping up their portfolios when prices are lower and/or taking advantage of lower entry points, they can often considerably strengthen their position.  The crypto market is no different.”