Finance

Goldman Sachs revives cryptocurrency desk to cash in on bitcoin hype

Goldman Sachs has relaunched its trading desk for cryptocurrencies as demand for bitcoin and other digital assets continues to increase.

A person familiar with the matter told Financial News the desk will be open for business in mid-March, starting with bitcoin futures and derivatives such as non-deliverable forwards, which allow speculation on bitcoin’s future price.

The desk will be part of Goldman’s global markets division as well as the bank’s other crypto and blockchain-related projects.

Goldman had previously submitted a request for information in January to explore custody for digital assets, and is similarly looking into an ETF for the world’s largest cryptocurrency.

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Bitcoin’s price has boomed more than 400% in 2021, as mounting institutional interest in the cryptocurrency bolsters retail investor activity.

Reuters first reported Goldman Sachs’ new cryptocurrency desk.

A 1 March report from Citigroup said adoption of the digital asset had reached a “tipping point”, which could see bitcoin either become the preferred currency for international trade, or repeat history with a burst price bubble.

“In a search for yield and alternative assets, investors are drawn to bitcoin’s inflation hedging properties and it is recognised as a source of ‘digital gold’ due to its finite supply,” said the US bank’s analysts.

READ Citi says bitcoin adoption’s at tipping point – here’s what could come next

Bitcoin’s price reached a high of more than $58,000 in February 2021, surpassing a $1tn market capitalisation to rival those of major tech companies such as Apple and Amazon. However, it remains volatile, retreating down to around $47,000 as of 1 March.

Prominent institutional investors in the cryptocurrency include Tesla and Square, while others such as BNY Mellon and BlackRock have said they are exploring ways to be involved with the digital asset.

In 2018, investment bank reacted to a surge in the price of bitcoin to explore launching cryptocurrency trading desks, but many of these projects were shortlived. Barclays halted work on its crypocurrency trading project just months after launch, Financial News reported.

To contact the author of this story with feedback or news, email Emily Nicolle

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