Goldman Sachs Re-Enters Crypto Arena

Goldman Sachs is relaunching its cryptocurrency trading desk in mid-March 2021 after a three-year hiatus due to regulatory concerns.

A source familiar with the matter told Reuters the investment bank also plans to once again support Bitcoin futures trading and eventually stage a bitcoin exchange-traded fund. The cryptocurrency desk will be part of Goldman’s U.S. Global Markets division.

The price of Bitcoin rallied more than 470% over the past year, coming as high as $58,000 in mid-February and crossing the $1 trillion market cap. The trading industry has stepped into crypto ever since the CME Group launched Bitcoin futures in late 2017. The price of BTC rallied to $20,000 at the time.

Since then, the industry has steadily prepared for the new asset class. Most recently, BNY Mellon announced a crypto custody service. Goldman Sachs is also looking to introduce a crypto custody offering within the coming months, according to the source.

Robinhood, the nearly disgraced broker in the wake of the social media trading frenzy, has nevertheless onboarded six million new customers in 2021 so far. The monthly average of new customers trading on Robinhood Crypto was about 200,000 customers during 2020.

Access to cryptocurrencies has become a deal-breaker for many choosing their next broker

2020 study conducted by derivatives analysis firm Acuiti found that adoption rates from trading firms in the APAC region were the highest in the world, at 57%, but they are also steadily growing everywhere else.  The report also identified “a growing split between demand from traditional trading firms to broaden their coverage of digital assets and the willingness or ability of sell-side firms to provide access”.

Arthur Azizov, founder at B2Broker, told The Industry Spread that crypto is the new future, which is not so far away.  “For example, take a look at China which has already launched RMB and rolled it out across the economy. The real goal behind this strategy is for their central bank to remove cash from the market, saving them money on, and maintenance of, currency issuance”, said Azizov.

“Changes are happening fast and any serious broker out there should start implementing crypto processing and take Crypto CFD liquidity without hesitation”, he continued, adding that crypto processing is his firm’s most requested product. B2Broker is working on extending its crypto CFD liquidity pool and on increasing leverage for the pool.

A number of established companies within the trading industry, including Devexperts and CMC Markets, have launched multi-asset platforms that allow the trading of Forex and CFDs on stocks, cryptocurrencies, indices, and other exchange-traded instruments, with direct access to ECN Liquidity from Top Tier Banks, Prime Brokers, and multiple Liquidity Providers.