Goldman Sachs Trades First Bitcoin Derivatives As Wall Street Eyes $2.4 Trillion Crypto Market

Published by andrewpbreen@gmail.com on

In yet another sign of institutional adoption, investment banking giant Goldman Sachs is expanding its role in the cryptosphere with new offerings for its clients.

According to a report from CNBC, Goldman Sachs has established a new crypto trading team to address the growing $2.4-trillion market. Partner Rajesh Venkataramani revealed the banking behemoth’s crypto expansion in a memo.

The team, which operates within the firm’s global currencies and emerging markets trading division, is reportedly trading two Bitcoin-linked derivatives. Venkataramani reveals Goldman has kicked off trading with Bitcoin non-deliverable forwards (NDFS), cash-settled futures contracts that allow investors to speculate on Bitcoin’s future price, as well as traditional futures contracts on the Chicago Mercantile Exchange (CME).

“As part of our initial launch, we have successfully executed Bitcoin (BTC) NDFs and CME BTC future trades on a principal basis, all cash settling. 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’s private bank clients and prime brokerage will be the first to gain access to the new trading team and market data.

According to Venkataramani,

“In addition, yesterday we launched our Digital Assets dashboard which provides daily and intraday cryptocurrency market data and news to our clients. We invite you to highlight the dashboard to your clients.”

While the bank is reportedly looking to expand its horizons within the crypto markets, Venkataramani clarifies at the end of the memo that, for now, the firm is not ready to directly trade or hold any cryptocurrencies.

“Please note, the firm is not in a position to trade bitcoin, or any cryptocurrency (including Ethereum) on a physical basis.”

Goldman’s launch of the new trading desk was foreshadowed last month when it was revealed they were preparing to offer crypto investments to their wealthy clients. Bitcoin is currently trading at $58,224 and has a market capitalization of $1.08 trillion.

Mary Rich, the newly-named global head of digital assets for Goldman’s private wealth management division, said the bank was looking to offer a “full spectrum” of Bitcoin and other crypto-related products.

“We’re still in the very nascent stages of this ecosystem; no one knows exactly how it will evolve or what shape it will be, but I think it’s fairly safe to expect it will be part of our future.”

Reports about Goldman’s entry into the cryptosphere first surfaced in 2018.

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