Though executives made sure to specify they would only be trading derivatives, and will not have actual digital assets on the books, one of the largest investment banks in the world just launched a cryptocurrency trading desk
An internal Goldman Sachs memo announcing the launch of a cryptocurrency trading desk and which and of which the desk will be part of Goldman’s Global Currencies and Emerging Markets division, and overseen by Digital Assets head Mathew McDermott, according to a CNBC report this morning
Also, a derivative tied to the price of Bitcoin, Goldman had begun offering BTC trading to clients via non-deliverable forwards (NDFs), Goldman’s risk of exposure to BTC are lessened with the aforementioned kind of derivatives, because the vehicles are bought and settled in cash
The newly-formed trading desk currently will only trade in NDFs, alongside “CME BTC future trades on a principal basis, all cash settling, according to the Memo written by Goldman partner Rajesh Venkarataramni.
Venkataramani noted that the asset management giant “is not in a position to trade bitcoin, or any cryptocurrency (including Ethereum) on a physical basis” and that they would be circumspect about trading and offering clients exposure to assets aside from Bitcoin derivatives.
“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,” he wrote.
Goldman has maintained a on-again, off-again relationship with cryptocurrencies. In late 2017 there were rumors that the asset management firm was exploring a desk (though they were concerned with security then, as well), a move that some jokingly refer to as a top signal — though in 2019 Goldman Sachs CEO David Solomon refuted that story.