Updated 16 Mar, 2021

Goldman Sachs Restarted Crypto Trading Desk

Goldman Sachs Restarted Crypto Trading Desk

 

Key Takeaways:

  • Goldman Sachs relaunches cryptocurrency trading desk
  • About 40% of Goldman’s customers own some crypto

Increased Demand for Digital Assets Drives Crypto Trading Desk

Goldman Sachs, one of the leading investment banks in the US, announced earlier in March that, due to heightened clients’ interest, it is bringing back its crypto trading desk. The move is a renewed attempt to offer its large base of institutional clients access to cryptocurrencies, more specifically, Bitcoin. According to the banking giant, the decision is a result of the increasing demand for digital assets among its customer base.

The concept of a crypto trading desk by Goldman Sachs was born in late 2017 when Bitcoin was flying high to reach its then all-time top of $19,500. However, as prices dipped and bitcoin hit rock bottom, Goldman Sachs balked at launching its crypto trading desk. This time around, the current crypto space is offering a different structure as now institutional backing plays a solid role in keeping the optimism alive while bitcoin keeps breaking records.

With renewed hopes amid the crypto boom, Goldman Sachs has restarted its cryptocurrency trading desk and is now dealing with Bitcoin futures for its clients. The service is offered through the bank’s Global Markets division. The head of the division, Mathew McDermott, recently said that nearly 40% of Goldman Sachs’ investors have some exposure to bitcoin and cryptocurrencies.

Giving Customers What they Want

In addition to a cryptocurrency trading desk, the top Wall Street firm is floating the idea of a Bitcoin exchange-traded fund (ETF) along with ways to provide digital asset custody. In order to meet the rising demand for crypto assets, Goldman Sachs chief operating officer (COO) John Waldron, said the bank “continues to evaluate” what they can do to offer services and products related to the cryptocurrency market.

JPMorgan, another top banking institution and one of Goldman’s main rivals, is also exploring ways to get involved with crypto. In a drastic paradigm shift, JPMorgan’s CEO Jamie Dimon who in late 2017 called bitcoin “a fraud” and said he would fire any employee who traded it, has turned positive on the digital asset. A few weeks ago, JPMorgan released a letter to clients in which it recommended investors to allocate up to 1% of their funds to cryptocurrencies as a way to diversify their portfolio.