Goldman Sachs executes its first bitcoin derivatives trades

Goldman Sachs executed its first cryptocurrency trades and formalised the set-up of its bitcoin desk on Friday, two months after the US financial institution introduced that it will re-enter the fledgling market.

In a memo despatched to employees on Thursday, seen by the Financial Times, Rajesh Venkataramani, head of main currencies, knowledgeable employees that the financial institution had “successfully executed” trades of two sorts of bitcoin-linked derivatives.

The financial institution stated on March 1 that it will relaunch its mothballed cryptocurrency buying and selling desk on account of rising demand from institutional shoppers. Goldman was one of many first banks to arrange a crypto operation however the creation of the desk in 2018 coincided with bitcoin’s spectacular worth crash, prompting the financial institution to quietly abandon the preliminary undertaking.

The worth of bitcoin, the biggest cryptocurrency by quantity, is up 95 per cent because the begin of the yr after a spectacular rally final yr that noticed it turn out to be one of many best-performing monetary belongings on this planet. On Friday, bitcoin was buying and selling at $57,385.

The revived Goldman buying and selling desk won’t deal in money cryptocurrencies however as an alternative commerce futures and non-deliverable forwards as a part of the initially “quite narrow” push into the area, in keeping with Mathew McDermott, head of the digital belongings group.

Initially the financial institution will solely enable its prime brokerage and personal financial institution shoppers entry to its buying and selling group and cryptocurrency analysis.

Venkataramani will head the cryptocurrency buying and selling group whereas McDermott will oversee areas together with central financial institution digital currencies and blockchain. The new group sits throughout the financial institution’s world currencies and rising markets enterprise.

“I am pleased to announce the formation of the firm’s cryptocurrency trading team, which will be our centralised desk for managing cryptocurrency risk for our clients,” Venkataramani wrote within the memo despatched on Thursday, which was first reported by CNBC.

The financial institution has additionally launched a cryptocurrencies dashboard for shoppers to offer market information and details about bitcoin and options. Due to regulatory considerations, banks are unable to commerce money cryptocurrencies, and are restricted to regulated markets similar to bitcoin futures on the Chicago Mercantile Exchange.

“Looking ahead, as we continue to broaden our market presence, albeit in a measured way, we are selectively onboarding new liquidity providers to help us in expanding our offering,” Venkataramani added.

McDermott stated in a podcast in early March that the financial institution has seen a surge in demand for cryptocurrency providers since final yr, noting that the present rally in bitcoin has been pushed by skilled shoppers slightly than retail buyers.

Goldman is one among a handful of enormous US banks which have just lately introduced tentative efforts to enter the booming crypto enviornment.

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