US Banking Giant Goldman Sachs Reopens Its Bitcoin Trading Desk

News / 01.03.2021

The American multinational investment bank and financial services company, Goldman Sachs Group Inc, plans to reopen its cryptocurrency trading desk and start trading bitcoin derivatives. 

According to a Monday report citing sources familiar with the matter, Goldman Sachs will sit within its Global Markets Division and “begin dealing bitcoin futures and non-deliverable forwards for clients from next week.”

Additionally, the banking giant will also be “exploring the potential for a bitcoin exchange-traded fund and has issued a request for information to explore digital asset custody.”

Goldman Sachs had first launched a Bitcoin trading desk back in 2018 but eventually discontinued the service following a major bear market which caused investors to lose interest in the crypto asset. 

The financial services company even went as far as criticizing cryptocurrencies, especially bitcoin, leading to its infamous criticism of all time.

A Bitcoin Critic

Goldman Sachs told investors during a conference call in May 2020 that cryptocurrencies are not an asset class, stating that “a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients.”

However, with bitcoin’s price soaring more than 470% since last year, reaching new all-time highs, and growing interest among institutional investors, Goldman Sachs is re-joining the bitcoin bandwagon. 

The market infrastructure for the digital asset has matured over the past few years seeing as several established financial institutions like CME Group have entered the game, and this has attracted several multinational companies.

These large institutional investors view bitcoin as a hedge against inflation, heightened by the money printing spree that central banks worldwide have embarked on.

Although bitcoin is still as volatile as ever, with prices reaching high peaks and subsequently slumping to steep slopes, the digital asset is still holding up strong.

Interestingly, its volatility is one of the most attractive features for daring investors willing to take on long and short positions that possess more risks as they scour for huge returns.

Mandy Williams joined the crypto space in 2016, and since then she has been learning and writing about cryptocurrencies and blockchain technology.