One of the biggest investment banks across the globe just rolled out a crypto trading desk, even though executives ensured that they will deal only with derivatives and will not hold cryptos on their books.
An in-house memo of Goldman Sachs revealed the roll out of a crypto trading desk, which will be a portion of Goldman’s Global Currencies and Emerging Markets unit, and supervised by Digital Assets chief Mathew McDermott.
The report has come soon after a report published yesterday that Goldman has started facilitating Bitocin trading to its customers through non-deliverable forwards (NDFs), a derivative linked to the price of Bitcoin.
Observers indicated that the preference of derivative minimizes Goldman’s threat of exposure to Bitcoins because the vehicles are purchased and settled through cash payment.
The notation of Goldman executive Rajesh Venkataramani indicated that the recently set up trading desk presently will trade only NDFs, in addition to “CME BTC future trades on a principal basis, all cash settling.”
Venkataramani pointed out that the asset administration giant “is not in a position to trade bitcoin, or any cryptocurrency (including Ethereum) on a physical basis.” Additionally, he stated that Goldman Sachs would be vigilant about trading and provide exposure to assets in addition to Bitcoin derivatives.
Venkataramani wrote “Looking ahead, as we continue to broaden our market presence, albeit in a measured way, we are selectively onboarding new liquidity providers to help us in expanding our offering.”
Goldman has been having an on and off relationship with cryptos. In the final leg of 2017, there were unconfirmed reports that the wealth management firm was studying the feasibility of having a trading desk, an initiative that some people jokingly referred to as a major signal, although the news was brushed away by David Solomon, CEO of Goldman Sachs in 2019.
Us old-timers have learned that whenever @GoldmanSachs enters a market niche it is time to guard your money. $BTC pic.twitter.com/tHfRkS4igb
— Peter Brandt (@PeterLBrandt) March 1, 2021
In spite of the careful entry into trading, Goldman Sachs has been vigorously taking other initiatives to gain from blockchain technology. The company is taking part in the sale of $120 million digital bond, hosted on Ethereum, announced recently. Furthermore, the enterprise also participated in a $15 million fund raising event for cryptocurrency intelligence firm Coin Metrics.
