Bitcoin’s meteoric rise in the last twelve months has created unprecedented demand from institutional clients that have watched the party from the sideline all the while.
In a Reuter’s report today, Goldman Sachs Chief Operating Officer (COO) John Waldron confirmed that the financial giant is among those that are seeing rising client demand to own and invest in Bitcoin. Goldman Sachs restarted its cryptocurrency trading desk last week and is pursuing many other efforts to provide clients with exposure to Bitcoin.
Waldron said regulatory challenges are one of the factors constraining how fully Goldman Sachs can serve the growing demand. He told Reuters:
“Client [for Bitcoin] demand is rising. We are regulated on what we can do. We continue to evaluate it … and engage on it.”
Aside from restarting its cryptocurrency trading desk, Goldman Sachs began offering Bitcoin futures and non-deliverable forwards this month. The bank is also exploring the possibility of a launched a Bitcoin exchange-traded fund, a product that many believe would further legitimize Bitcoin as an asset.
Quizzed on what he thinks is behind the explosion of public interest in Bitcoin and other digital currencies, the Goldman Sachs official pinpointed the COVID-19 pandemic.
“The pandemic has been a significant accelerant. There is no question in our mind there will be more digital commerce … and (use of) digital money.” Waldron said.
Bitcoin Meets Traditional Finance
Goldman Sachs is understandably not alone in the race to provide clients exposure to Bitcoin and the cryptocurrency market.
Last month, major competitor BNY Mellon disclosed plans to offer Bitcoin services and set up a cryptocurrency-focused unit later this year.
J.P Morgan also pulled strings of its own when it announced Tuesday the launch of a new investment product dubbed “Cryptocurrency Exposure Basket.” The bank is issuing investment notes tracking the equity performance of U.S companies that are either directly invested in Bitcoin or funding related operations. Shortlisted companies include MicroStrategy, Square, Marathon Group, and others.
