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Goldman Sachs ran its first cryptocurrency business and formalized the setup of its bitcoin counter on Friday, two months after the US bank announced it would re-enter the fledgling market.
In a note sent to staff on Thursday, seen by the Financial Times, Rajesh Venkataramani, head of major currencies, informed staff that the bank had “successfully executed” transactions in two types of bitcoin-linked derivatives.
The bank said on March 1 that it would re-launch its cryptocurrency trading office due to growing demand from institutional customers. Goldman was one of the first banks to create a crypto operation, but the creation of the desktop in 2018 coincided with the dramatic fall in Bitcoin prices, which caused the bank to leave quietly the initial project.
The value of bitcoin, the biggest cryptocurrency by volume, it has risen 95% since the beginning of the year after a spectacular rally last year that made it one of the best-performing financial assets in the world. On Friday, Bitcoin was trading at $ 57,385.
According to Mathew McDermott, head of the digital assets team, the Goldman trading desk will not resell cash cryptocurrencies, but will trade futures and non-deliverables as part of the initially “fairly narrow” push toward space.
Initially, the bank would only allow its brokerage clients and private banks access to its trading equipment and cryptocurrency research.
Venkataramani will lead the cryptocurrency trading team, while McDermott will oversee areas, including central bank digital currencies and the blockchain. The new team is within the bank’s forex and emerging markets business.
“I am pleased to announce the formation of the company’s cryptocurrency trading team, which will be our centralized counter to manage cryptocurrency risk for our clients,” Venkataramani wrote in the note sent on Thursday, which was reported for the first time by CNBC.
The bank has also launched a cryptocurrency dashboard for customers to provide market data and information on bitcoins and alternatives. Due to regulatory concerns, banks are unable to trade cash cryptocurrencies and are limited to regulated markets such as bitcoin futures on the Chicago Mercantile Exchange.
“Looking to the future, as we continue to expand our market presence, albeit in a measured way, we will selectively incorporate new liquidity providers to help us expand our offering,” Venkataramani added.
McDermott said in a podcast in early March that the bank has experienced an increase in demand for cryptocurrency services since last year, noting that the current rally of Bitcoin has been driven by professional customers instead of retail investors.
Goldman is one of the handful of large American banks that have recently announced interim efforts to enter the cryptographic pastime.
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