By
Bhushan Akolkar
April 16th, 2024
Goldman Sachs first launched a cryptocurrency trading desk back in 2018. However, at that time, Bitcoin’s price was plunging, which did not encourage interest in the currency at all.
Goldman Sachs Group Inc (NYSE: GS) is reopening its cryptocurrency trading desk. Starting next week, it will offer Bitcoin (BTC) futures and non-deliverable forwards (NDFs). According to those familiar with the matter, Goldman Sachs is also considering offering Bitcoin exchange-traded funds (ETF). Besides, it is exploring the potential of digital asset custody.
As Reuters has reported, the team behind the trading desk will sit within the company’s Global Markets division. Goldman Sachs’ decision to relaunch cryptocurrency trading desk results from the Bitcoin boom and its expanding adoption. As the digital assets sector is growing rapidly, Bitcoin has been embraced by institutional investors, with big names showing interest in BTC investments. For example, Tesla Inc (NASDAQ: TSLA) is one of the latest companies that gave a chance to Bitcoin and made a $1.5 billion BTC investment. Japanese e-commerce and online retailing company Rakuten Inc (TOKYO: 4755) has added Bitcoin to its platform as well.
Citigroup Inc (NYSE: C) has laid out a case for Bitcoin to play a bigger role in the global financial system as well. As Citigroup explained, they believe Bitcoin could become “the currency of choice for international trade” in the years ahead.
Over the past year, Bitcoin soared by over 470%. Now, many investors consider it as a hedge against inflation, while others believe in the currency’s potential to become a mainstream form of payment in the future.
As of the press moment, Bitcoin is trading at $49,095.77. Its market cap has reached $916 billion.
Goldman Sachs Cryptocurrency Trading Desk: Now the Right Time?
Goldman first launched a cryptocurrency trading desk back in 2018. However, at that time, Bitcoin’s price was plunging, which did not encourage interest in the currency at all. Besides, the regulatory situation in the US was still a gray area when it came to digital assets. Therefore, Goldman Sachs abandoned its plans, saying that BTC was “not an asset class” and “not a suitable investment”. Instead, the bank decided to focus on cryptocurrency custody service.
It seems now it is the right time for Goldman Sachs to get back to its original plans. Earlier this year, the Global Head of Commodities Research in the Global Investment Research Division at Goldman Sachs, Jeff Currie, said that the Bitcoin market is “beginning to become more mature.”
Currie said:
“I think in any nascent market you get that volatility and those risks that are associated with it.”
Even Peter Schiff, one of Bitcoin’s harshest critics, has admitted that Wall Street has changed its stance on the currency.
I find it interesting that major Wall Street firms, that loaded up on subprime mortgages and were completely blind-sided by the 2008 financial crisis, that would have gone bankrupt but for Fed bailouts, now advocate buying #Bitcoin to profit from the Fed's bailout of the economy.
— Peter Schiff (@PeterSchiff) March 1, 2021
Bitcoin price expectations are growing as well. In particular, Morgan Creek’s CEO Mark Yusko believes Bitcoin has all chances to hit $100,000 this year. Meanwhile, Gemini exchange founders Tyler and Cameron Winklevoss state that Bitcoin is “a better gold than gold,” which means that its price rising to $500,000 is now inevitable.