Goldman Sachs will reopen its crypto trading desk from next week, according to exclusive news from Reuters.
The trading desk will belong to Goldman’s digital asset sector, including other projects related to blockchain and digital currencies.
Goldman will initially offer clients Bitcoin futures and non-transaction futures (NDF) contracts. The bank is also looking at offering Bitcoin exchange-traded funds (ETFs), as well as investigating digital asset custody.
Overall, the digital asset sector is part of the US bank’s Global Markets division.
The level of institutional interest has increased
The reopening comes amid increasing institutional interest in BTC, as the price of the leading cryptocurrency has soared by 470% over the past year.
One reason investors and some companies keep an eye on BTC is that there are growing ideas that it can protect against rising inflation. In particular, this appeared when governments around the world spent billions of dollars stimulating the economy to collapse due to the Corona pandemic.
Despite this growing consensus, BTC is still very volatile. That is the main reason why institutional investors have been hesitating so far. Goldman hopes to minimize the risk to its clients by offering the NDF, a type of derivative tool that allows investors to consider the price of an asset in the future.
Goldman first opened a cryptocurrency exchange in 2018. However, at that time, the price of BTC dropped from record highs, losing much of the interest from the mainstream market. Last year, the investment bank reported that BTC is “not an asset class” and “not the right investment”.
Since then, a number of financial institutions have been established, such as the CME Group. Intercontinental Exchange and Fidelity Investments have adopted cryptocurrencies because the market infrastructure for them is legally developed.
Bitcoin at ‘tipping point’
As reported, Citi bank recently stated that BTC was at “tipping point”. As more and more companies like Tesla are embracing, BTC may be moving toward a “massive shift” into the mainstream. On the other hand, the report warns of the possibility of a “speculative boom”.
As reported by Citi, the widespread adoption of BTC will depend on mainstream financial adoption of digital currencies and wallets. Goldman’s re-establishment of its crypto trading desk makes good sense for this result.