Cryptocurrency has caught the attention of one the largest investment banks in the world, and that's setting the stage for a true clash of the titans.

Lloyd Blankfein's Goldman Sachs (GS - Get Report) is now considering a trading operation that focuses on Bitcoin. This latest move would make Goldman Sachs the first major investment bank to deal directly in Bitcoin. On Tuesday afternoon, he clarified that he's "[s]till thinking about #Bitcoin" but intimated it could be part of the next evolution of money:

Still thinking about #Bitcoin. No conclusion - not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.

— Lloyd Blankfein (@lloydblankfein) October 3, 2017 

But that interest in the digital currency stands in stark contrast to the antagonism JP Morgan Chase (JPM - Get Report) CEO Jamie Dimon has directed toward Bitcoin, which he's labeled "a fraud" and "worse than tulip bulbs." In a sense, Goldman's foray into Bitcoin could set up a scenario where Blankfein's taste for risk steals the spotlight from Dimon's naysaying, as some have suggested on Twitter.

Dimon: Bitcoin is a fraud
Blankfein: Hold my beer

— Georgi Kantchev (@georgikantchev) October 2, 2017

Of course, despite Dimon's criticism, JPMorgan staff traded Bitcoin derivatives for clients on Stockholm-based exchange Nasdaq Nordic before and after Dimon's statements, which fueled volatility in the market. In Europe, Blockswater LLP has filed a market abuse report against JPMorgan's Dimon for "spreading false and misleading information" about Bitcoin. 

Especially in light of Dimon's Bitcoin criticism and JPMorgan's hesitant attitude toward it, cryptocurrency traders are excited about Goldman's latest move. 

"The amazing appreciation of cryptocurrencies in the past two years has greatly surpassed even the booming public markets, which are hitting new highs almost daily," said Alex Mashinsky, the CEO of Celsius. "Even GS can't sit idle and see this asset class balloon without them. Over $150 billion in capital is now invested in this asset class and this number is expected to grow ten times over the next decade."

Bitcoin is maturing quickly

Sol Lederer, blockchain director at LOOMIA, said it's becoming apparent that Bitcoin has matured past the point where people's knee-jerk reaction is, "Oh that's used for drugs and money laundering."

With the recent conversation focused around blockchain technology, Bitcoin has passed a threshold of legitimacy needed for a reputable institution to dabble in it.

"Goldman has many alternative investments already that we would find surprising," Lederer said. "They were close to putting $300 million into 'celebrity bonds' --bonds backed by Bob Dylan royalties -- and they have made bets on the recidivism rates of Rikers Island inmates. So the threshold for an investment bank just has to be high enough that they can justify it to their clients. Apparently Bitcoin has just crossed that line." 

When a retirement account custodian like Fidelity is getting in on Bitcoin and letting blockchain users track their crypto investments along with traditional investments, it's clear that Bitcoin is no longer just a speculative flash in the pan. 

With Goldman's interest, the momentum could spread to other major financial institutions. The fact that Goldman Sachs is considering the launch of a Bitcoin and digital currency trading operation is "excellent news for the industry," said Rob Viglione, co-Founder of ZenCash, and shows that the firm continues to lead its peers. For those institutions looking to be on the cutting edge of innovation, this is their chance.

"The big news here - whether GS moves forward with this or not - is that cryptocurrency markets seem to be reaching the minimum level of maturity required for institutional money," Viglione said. "That's a significant milestone and could well signal a step-function type boost to liquidity, depth and all the other important characteristics that make for modern capital markets." 

Bharath Rao, CEO of Leverj, the decentralized exchange for cryptocurrency derivatives, explained the returns on cryptocurrency have been nothing short of spectacular and that major institutions will reap major rewards. 

Rao said he is "excited to see mainstream institutions entering this Bitcoin and blockchain space."

Of course, change won't be immediate. He added that a large institution such as Goldman Sachs will take its time before jumping straight into a market until it has checked the boxes for the necessary operational readiness, regulatory certainty and technical depth. 

There's no doubt that Goldman's interest in entering the market will be good news for crypto fans. 

But a prominent battle between Blankfein and Dimon on how they view Bitcoin is brewing. And Blankfein has thrown down the gauntlet. 

Are you investing in cryptocurrency? Don't miss TheStreet's coverage: