Goldman Sachs formerly launches new cryptocurrency trading desk

Cryptocurrency is here to stay. As we reported back in March, Goldman Sachs said it plans to start offering bitcoin, crypto, and other digital assets to wealthy investors. At the time, the Wall Street giant aimed to begin offering investments in the emerging asset class in the second quarter of 2020, according to a report from CNBC, citing an exclusive interview with Mary Rich, who was recently named global head of digital assets for Goldman’s private wealth management division.

Now, it seems the launch is coming sooner than later. Today, Goldman Sachs announced the formation Of a new cryptocurrency trading desk, according to an internal memo obtained exclusively by CNBC. According to the internal memo, the bank informed its market personnel that a newly created cryptocurrency desk had successfully traded two kinds of bitcoin-linked derivatives.

As part of the initial launch, the Wall Street giant also said it had successfully executed Bitcoin NDFs and BTC future trades on the CME on a principal basis, with all cash settling. Goldman said that it is selectively onboarding new liquidity providers to help expand the firm’s offering.

CNBC is not alone in confirming the launch, Bloomberg also reported yesterday that as part of its Goldman’s NDF derivative offering, the bank then protects itself from Bitcoin’s volatility by buying and selling Bitcoin futures in block trades on CME Group Inc., using Cumberland DRW as its trading partner. Goldman, which still isn’t active in the Bitcoin spot market, introduced the wagers to clients last month without an announcement.

“Institutional demand continues to grow significantly in this space, and being able to work with partners like Cumberland will help us expand our capabilities,” said Max Minton, Goldman’s Asia-Pacific head of digital assets. The new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities

Below is the internal memo:

May 6, 2021

Formation of Cryptocurrency Trading Team

I am pleased to announce the formation of the firm’s cryptocurrency trading team, which will be our centralized desk for managing cryptocurrency risk for our clients. The Crypto trading team will be a part of Global Currencies and Emerging Markets (GCEM), reporting to me, within the firm’s Digital Assets effort led by Mathew McDermott.

As part of our initial launch, we have successfully executed Bitcoin (BTC) NDFs and CME BTC future trades on a principal basis, all cash settling. 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.

In addition, yesterday we launched our Digital Assets dashboard which provides daily and intraday cryptocurrency market data and news to our clients. We invite you to highlight the dashboard to your clients. For more information on trade approval and onboarding, contact the Digital Assets team.

Please note, the firm is not in a position to trade bitcoin, or any cryptocurrency (including Ethereum) on a physical basis.

Rajesh Venkataramani