Despite bitcoin’s apparent lull after plunging over 30% from its historic high in May, institutional interest in bitcoin is still rising. United States investment bank Goldman Sachs has launched a bitcoin (BTC) futures trading product for its clients in partnership with Mike Novogratz’s crypto merchant bank, Galaxy Digital.
Goldman Sachs’ Bitcoin Adventure
Galaxy Digital will provide liquidity to the bank, according to a report by CNBC. Liquidity providers, otherwise known as market makers, scoop up vast amounts of a given asset before selling them to the next interested party. This means that Goldman Sachs’ clients can always purchase bitcoin regardless of the market conditions.
Notably, this is the first the Wall Street giant has teamed up with a crypto-focused liquidity provider since reinstating its cryptocurrency trading desk in March after a three-year break. The bank is now set to offer the Chicago Mercantile (CME) Group Bitcoin Futures to its clients, marking an effort to expand its newly-reopened trading desk.
Goldman Sachs Asia Pacific head of digital assets, Max Minton, observed that the bank is responding to demand from its clients:
“Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade. In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.”
Galaxy Digital co-president Damien Vanderwilt said the firm is providing a pathway to the cryptoverse, enabling a highly regulated banking institution like Goldman to offer crypto-based investment vehicles. Vanderwilt also noted that Goldman Sachs’ move will likely encourage other major banks to give crypto a shot. And when more banks allow their institutional clients to trade bitcoin, the cryptocurrency’s notorious volatility is bound to decrease.
It’s worth mentioning that Goldman Sachs is also planning to offer ether (ETH) futures and options in the coming months.
Despite the investment bank’s latest move, not everyone at Goldman is sold on digital currencies. Just days ago, Goldman’s Investment Strategy Group released a report titled “Digital Assets: Beauty Is Not in The Eye of the Beholder” asserting that cryptocurrencies are not a “viable investment” for its clients.