Daily Management Review

Goldman Sachs sets up a division for cryptocurrency trading


Goldman Sachs has become the first major US investment bank to establish a cryptocurrency trading desk. The team has already successfully traded two types of bitcoin-related derivatives.

Goldman Sachs has officially launched the era of cryptocurrency trading on Wall Street. The bank has officially informed its marketers that its newly created cryptocurrency division has successfully traded two types of bitcoin-related derivatives, CNBC reported, citing an internal memo.

The new trading unit is part of Goldman Sachs' Global Currencies and Emerging Markets arm, which is managed by the bank's partner Rajesh Venkataramani.

"As part of our initial launch, we have successfully executed NDF bitcoin trades," Venkataramani said in a document. The bank will protect itself against cryptocurrency volatility by buying and selling bitcoin futures in block trades on the Chicago Mercantile Exchange (CME) through Cumberland DRW. 

The note stresses that as it continues to expand its presence in the market, the bank will selectively tap new liquidity providers to increase its supply.

The derivatives Goldman trades, bitcoin futures and non-deliverable forward contracts, allow betting on the price of bitcoin. The contracts are paid in cash and do not require Goldman to deal in actual bitcoin because the bank is not yet in a position to do so, Venkataramani noted in the memorandum.

Goldman Sachs has been mulling setting up a bitcoin trading desk since 2017, the channel noted. Earlier in March, Reuters reported that Goldman Sachs had restarted its cryptocurrency trading desk and would begin operating bitcoin futures and non-deliverable forward contracts for clients.

source: cnbc.com