Goldman Sachs Is Rebooting its Cryptocurrency Trading Desk After A Three Year Hiatus
Besides dealing Bitcoin futures next week, the bank is also exploring digital asset custody and a Bitcoin exchange-traded fund (ETF).
Goldman Sachs Group Inc is restarting its cryptocurrency trading desk and will begin dealing Bitcoin futures and non-deliverable forwards for its clients from next week.
The volatility of Bitcoin makes its derivatives attractive for investors allowing them to go long or short as institutions look for yield in an ultra-low interest rate environment.
Non-deliverable forwards (NDF) are a type of derivatives that are cash-settled and usually short-term, forward contracts that allow investors to bet on Bitcoin’s future price. Here, counterparties settle the difference between the contracted NDF price and the prevailing spot price.
The crypto team will be part of the banking giant’s Global Markets division, reported Reuters, citing a person familiar with the matter.
This crypto trading desk is also part of Goldman’s activities that includes projects involving blockchain technology and central bank digital currencies (CBDCs).
Goldman is apparently also exploring the potential for a Bitcoin exchange-traded fund (ETF), competition for which is gaining pace after the first Bitcoin ETF ever launched in Canada last month, receiving an overwhelming response with the Purpose Bitcoin ETF selling almost $400 million in shares in its first two days.
The US bank has issued a request for information to explore digital asset custody as well, the source said.
The revival of the trading desk comes amidst the bull rally, which has Bitcoin surging more than 12x from its March low. The leading digital currency soared to a new ATH of $58,300 last month, exceeding the $1 trillion market cap.
It was back in 2018, during the bear market, that Goldman first set up a cryptocurrency desk.