Last week, Goldman Sachs published a job listing for a cryptocurrency trader. This may seem like a small deal, but it is actually a big deal. Why? Because it shows that major finance institutions are finally acknowledging the role cryptocurrency plays in today’s world. It isn’t much of a stretch to imagine that Goldman Sachs will soon be considering providing cryptocurrency trading services to its clients, just as it does for stocks, commodities, etc.
Although the team has been around for about a month now, it didn’t become official until Goldman announced the creation of a Digital Asset Markets desk, which will be headed by the former head of the firm’s global commodities unit. The new unit will initially be focused on cryptocurrency trading, but it’s likely that it will be expanded to include other digital assets in coming years.
Investment bank Goldman Sachs has officially launched a cryptocurrency trading team, according to an internal memo from the company. Goldman Sachs says it is working to expand its presence in the cryptocurrency market and is currently selectively recruiting new liquidity providers to expand its cryptocurrency service.
Goldman Sachs now has a dedicated trading team for cryptocurrencies
Goldman Sachs has officially created a team to trade cryptocurrencies, according to an internal memo from the bank that CNBC accessed Friday. The publication reported that the memorandum was the first time a New York-based investment bank had officially admitted its involvement in cryptocurrency trading.
The memo, titled Forming a Cryptocurrency Trading Team, was written by Goldman partner Rajesh Venkataramani.
I am excited to announce the establishment of the firm’s crypto-currency trading team, which will become our centralized crypto-currency risk management service for our clients, he wrote. The cryptocurrency trading team will be part of the Global Currencies and Emerging Markets (GCEM) division, reporting to me, within the firm’s digital assets division, led by Matthew McDermott.
The manager clarified: As part of our initial launch, we successfully executed NDF [Non-Deliverable Forwards] transactions on bitcoin (BTC) and futures transactions on CME BTC on a principal basis, with full cash settlement :
As we continue to expand our market presence, albeit gradually, we are selectively recruiting new liquidity providers to help us expand our offering.
In addition, yesterday we launched the Digital Assets Dashboard, which provides our clients with daily and intraday data and insights into the cryptocurrency market, he continued. We invite you to draw your customers’ attention to the dashboard.
Venkataramani also clarified that the company is not able to trade bitcoin or other cryptocurrencies (including Ethereum) on a physical basis.
The crypto derivatives that Goldman trades – bitcoin futures and non-deliverable forwards (NDFs) – are settled in cash. Bitcoin News reported Thursday that Goldman Sachs is hedging bitcoin volatility by trading on CME Group, with Cumberland DRW as its trading partner.
In addition to Goldman Sachs, Morgan Stanley is already offering some bitcoin investments for high net worth clients. Citigroup is reportedly considering offering cryptocurrency services. Meanwhile, hundreds of smaller banks have reportedly agreed to allow their customers to buy, sell and store bitcoins through their existing bank accounts.
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