As Bitcoin endured one of its wildest trading weeks in history, the underlying financial infrastructure supporting the cryptocurrency was undergoing a seismic transformation. December 2017 saw the launch of Bitcoin futures contracts on two major U.S. exchanges, while Goldman Sachs quietly laid the groundwork for a dedicated cryptocurrency trading operation — milestones that would reshape the relationship between Wall Street and digital assets for years to come.
TL;DR
- CBOE launched Bitcoin futures on December 10, followed by CME Group shortly after
- Futures margin requirements were set at 44% (CBOE) and 47% (CME), reflecting extreme volatility
- Goldman Sachs was building a crypto trading desk targeting launch by end of June 2018
- Michael Novogratz shelved plans for a $500 million crypto hedge fund amid the crash
- Long Island Iced Tea rebranded to Long Blockchain, with shares surging 289%
Bitcoin futures trading marked a watershed moment for the cryptocurrency’s institutional credibility. The CBOE Global Markets exchange became the first traditional financial marketplace to offer Bitcoin futures on December 10, 2017, with the CME Group following suit days later. Both exchanges imposed remarkably high margin requirements — 44% at CBOE and 47% at CME — a clear acknowledgment of the extraordinary volatility that characterized Bitcoin at the time.
Goldman Sachs Bets on Crypto Infrastructure
Beneath the surface of Bitcoin’s dramatic price swings, Goldman Sachs was making a significant strategic bet on the cryptocurrency ecosystem. According to multiple reports in late December 2017, the investment bank was in the process of setting up a dedicated trading desk to make markets in digital currencies including Bitcoin. The initiative aimed to be operational by the end of June 2018, if not sooner.
The move from Goldman Sachs represented a pivotal moment for institutional adoption of cryptocurrency. As one of the most influential banks on Wall Street, its entry into digital asset trading signaled a level of legitimacy that had eluded the crypto market since its inception. Goldman was already one of a handful of financial institutions offering Bitcoin futures to select clients, and the planned trading desk represented a deeper commitment to the asset class.
Not Everyone Was Convinced
The institutional embrace of Bitcoin was far from universal. Several major banks expressed serious reservations about the rapid proliferation of cryptocurrency derivatives. In an open letter to the CFTC, a coalition of financial institutions raised concerns about the lack of transparency and adequate regulation surrounding Bitcoin futures products. UBS Group went further, publicly branding Bitcoin “the biggest speculative bubble in history” — a characterization that resonated with skeptics even as prices continued to attract new market participants.
Bank of Japan Governor Haruhiko Kuroda added his voice to the chorus of caution, stating that Bitcoin was not functioning as a normal means of payment and was instead being used primarily for speculative purposes. The comments from one of the world’s most important central bankers underscored the regulatory uncertainty hanging over the market.
Mania Signs Emerge Beyond Finance
The frenzy surrounding cryptocurrency had begun to spill over into unexpected corners of the market. Long Island Iced Tea Corp., an unprofitable beverage company based in Hicksville, New York, rebranded itself as Long Blockchain Corp. The announcement sent the company’s shares surging as much as 289% — a move that epitomized the speculative mania that had gripped markets in the final weeks of 2017.
Even prominent crypto bulls were showing signs of apprehension. Michael Novogratz, a former Goldman Sachs macro trader and Fortress Investment Group executive who had been one of the most vocal cryptocurrency advocates, announced he was shelving plans to launch a cryptocurrency hedge fund. “We didn’t like market conditions and we wanted to re-evaluate what we’re doing,” Novogratz said, just weeks after predicting Bitcoin could reach $40,000 within months.
Futures Create New Dynamics for Bitcoin
The launch of Bitcoin futures introduced a critical new dynamic to the cryptocurrency market: the ability to short Bitcoin through regulated, institutional channels. Prior to futures, bearish investors had limited options for expressing negative views on Bitcoin. The new instruments changed that calculus entirely, giving traditional financial players tools to bet against the cryptocurrency’s meteoric rise.
The high margin requirements reflected genuine concern about Bitcoin’s propensity for extreme price swings. During the December 22 crash alone, traders who had bought futures using collateral began facing margin calls as Bitcoin plunged from near $20,000 to lows around $10,776 before partially recovering to approximately $13,400.
Why This Matters
December 2017 was the month cryptocurrency collided with Wall Street. The launch of Bitcoin futures and Goldman Sachs’ planned trading desk represented the beginning of institutional infrastructure for digital assets — infrastructure that would later pave the way for Bitcoin ETFs, corporate treasury allocations, and the mainstream financial integration we see today. The irony was that these long-term bullish developments arrived precisely as Bitcoin was experiencing its most violent short-term correction, a reminder that fundamental progress and price action often move on very different timelines in the world of cryptocurrency.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.
44% margin on CBOE futures. they basically priced crypto as the riskiest asset on earth. turned out to be correct for about 3 weeks before it ripped to 20k
Long Island Iced Tea rebranding to Long Blockchain and pumping 289%. peak 2017 energy. the SEC fined them 4 years later but everyone involved already cashed out
44 percent margin on CBOE futures was basically the exchange saying we have no idea what this thing does. they priced in total chaos and still launched
44% margin on CBOE was basically the exchange saying we have no idea what this thing does. they priced in chaos and still got caught off guard
margin_stack_ 44 percent margin on CBOE was the exchange screaming we have zero risk model for this asset. they basically guessed
Goldman announced the crypto desk in 2017 and actually launched it what, 2021? institutional adoption moves at the speed of compliance meetings
Novogratz shelving 500M at the top and people still called him a crypto bull. the guy literally timed the peak perfectly
Novogratz putting $500M into crypto at the literal top of 2017 and then shelving it. at least he had the discipline to stop, most just doubled down
CandleStick_ novogratz had discipline to stop which is rare in crypto. most fund managers rode the 2018 bear all the way down because they couldnt accept being wrong
44% margin on CBOE and 47% on CME. they knew it was going to be wild
44% and 47% margin requirements and they still launched. exchanges wanted the fees and didnt care about the risk to traders
long island iced tea rebranding to long blockchain and pumping 289%. peak bubble behavior
Long Blockchain got delisted from Nasdaq within months. the 289% pump was pure retail FOMO on a beverage company pivoting to crypto
Long Blockchain pumping 289 percent on a rebrand is still the most 2017 thing ever. beverage company to crypto pivot with zero product
bubble_pop_ long blockchain got delisted within months and the 289% pump evaporated. literal cautionary tale that got taught in business schools
Elina J. long blockchain got delisted within months and business schools still use it as the textbook FOMO rebrand cautionary tale. 289 percent pump to zero
novogratz shelving his $500M fund because of the crash is still wild. guy went all in right before the top
goldman building a crypto desk in 2017 felt like the ultimate validation. took them years to actually follow through though
goldman took until 2021 to actually offer crypto trading. the 2017 desk was talk and a headline. institutional adoption was always slower than the press releases
cme_boomer_ goldman announced a trading desk in 2017 and didnt actually offer crypto until 2021. the press release was worth more than the product
cme_boomer_ Goldman announced 2017 launched 2021. classic institutional timeline. press release first product never
44 and 47 percent margin on those first futures contracts. exchanges knew exactly what was coming and wanted the fees anyway
Long Blockchain pumped 289% on a name change and got delisted within months. we still see this exact playbook with random tickers adding crypto to their name
Novogratz shelving the 500M fund at the top is honestly the most disciplined thing a crypto fund manager has ever done. most just rode it all the way down
44 percent margin on CBOE was the exchange pricing in pure chaos. turns out they were right for about 2 weeks before BTC ripped to 20k