Goldman Sachs will reportedly offer ether options for clients as the firm expands its crypto-trading business

  • Goldman Sachs will offer ether options and futures to its clients, Bloomberg first reported.
  • “We’ve actually seen a lot of interest from clients who are eager to trade,” Mathew McDermott of Goldman said.
  • The bank also has plans to facilitate trades via exchange-traded notes tracking bitcoin.
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Goldman Sachs will offer ether options and futures to its clients as the investment bank expands its cryptocurrency trading business, Bloomberg first reported.

“We’ve actually seen a lot of interest from clients who are eager to trade as they find these levels as a slightly more palatable entry point,” Mathew McDermott, head of digital assets at Goldman, told Bloomberg.

He continued: “We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”

The New York-based bank is expanding from its bitcoin offering after restarting its cryptocurrency trading desk to trade bitcoin futures earlier this year amid a boom in the popular coin. Goldman first set up a cryptocurrency desk in 2018.

The 47-year-old McDermott also told Bloomberg that Goldman has plans to facilitate trades via exchange-traded notes tracking bitcoin.

Cryptocurrencies, led by bitcoin, have staged a modest rebound on Monday following its massive crash in May when it lost almost half of its market value in one week alone.

Yet a recent finding from crypto-asset broker Voyager revealed that 81% of respondents in a recent survey are more confident in the future of cryptocurrency following last month’s sell-off.

“Institutional adoption will continue,” McDermott said. “Despite the material price correction, we continue to see a significant amount of interest in this space.”

In March, that bank’s COO and president John Waldron said he has seen an increase in interest from his clients when it comes to investing in bitcoin.

“Client demand is rising,” Waldron said in a Wolfe Virtual FinTech Forum. “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.”

Read more: Goldman Sachs says buy these 37 stocks that will offer strong returns with minimal risk through year-end as growth names regain leadership

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Wall Street brokers are reportedly limiting short bets against meme stocks by hedge funds

AMC Entertainment
  • Major Wall Street brokers are tightening rules over who can bet against meme stocks that are popular with retail traders, according to Bloomberg.
  • Goldman Sachs, Bank of America, Citigroup, and Jefferies Financial are among the firms that have adjusted risk controls.
  • Jefferies Prime Brokerage will no longer offer custody on naked options in AMC Entertainment, GameStop, and MicroVision, the report said.
  • See more stories on Insider’s business page.

Some of Wall Street’s largest brokers are quietly tightening rules on who can bet against meme stocks popular among retail traders in an effort to protect themselves against the fallout from sharp price surges and falls, according to a Bloomberg News report.

Firms that have adjusted risk controls at their prime-brokerage operations include Goldman Sachs, Bank of America, Citigroup, and Jefferies Financial Group, the Friday report said, citing people familiar with discussions about internal policy decisions.

With the adjustments, some hedge funds and other institutional investors now face higher collateral requirements or are limited from shorting certain stocks.

Jefferies Prime Brokerage will no longer offer custody on naked options in AMC Entertainment, GameStop, and MicroVision, the firm told clients in a memo seen by Bloomberg News. Naked options allow investors to short a stock without owning the underlying securities. Jefferies will not permit short sales of those securities and other stocks may be added to its list.

The changes come during a new wave of rallies among so-called meme stocks including AMC GameStop as retail investors on social media sites such as Reddit’s Wall Streets Bets forum band together to force short squeezes on hedge funds that betting shares of the companies will fall. AMC has been the key focus of the latest rally, similar to GameStop’s role during a trending frenzy in January.

It’s not unusual for banks to make risk-control adjustments as market conditions change, the report noted.

A number of brokerages have been looking over their risk controls after some large prime brokers in March were forced to liquidate at a discount the multibillion-dollar portfolio of Bill Hwang’s Archegos Capital Management. The family office collapsed after making wrong-way bets on media and technology companies. Bank of America and Citigroup were not hurt by the Archegos matter, Bloomberg said.

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The massive jobs shortage will keep stronger inflation temporary, Goldman Sachs says

Job fair coronavirus
People seeking employment speak to recruiters at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds.

  • Stronger inflation will soon fade as millions of Americans rush back to work, Goldman Sachs said.
  • Labor supply will rebound as virus fears fade and enhanced unemployment benefits lapse, the bank said.
  • Ending the labor shortage should cool wage inflation, and price inflation will also likely be temporary, Goldman added.
  • See more stories on Insider’s business page.

When it comes to the inflation debate looming over the US economy, Goldman Sachs is on the side of the Federal Reserve and the Biden administration.

Gauges of nationwide price growth are surging at their fastest rate in more than a decade, sparking concerns of an overheating economy ending the recovery early. Republicans and some moderate Democrats have blamed the Fed’s ultra-easy policy stance and unprecedented fiscal stimulus for the inflation overshoot. The Biden administration and the central bank have instead argued the stronger price growth is temporary and fade starting next year.

Goldman economists led by Jan Hatzius reiterated their stance on the Biden side on Monday, citing the latest jobs numbers as supporting evidence. The US added 559,000 nonfarm payrolls in May, missing the median estimate but still a sharp rebound from the dismal April report. Wages shot higher for a second straight month, signaling inflation was picking up in pay and pricing.

The combination of soaring wages and stronger inflation amplified Republicans’ claims of an overheating economy. Yet both pressures should cool in the coming months, Goldman said. For one, the economy is still down roughly 8 million payrolls, and May’s pace of job creation still places a full recovery more than a year into the future. Labor supply, which has been slowing hiring in recent months, should also “increase dramatically” as virus fears dim and enhanced unemployment insurance lapses. As more Americans return to work, wage growth is expected to slow.

Inflation should also cool on the pricing side, according to the bank. Goldman’s trimmed core Personal Consumption Expenditures (PCE) index – which excludes the 30% largest month-over-month price changes – has only risen 1.6% from the year-ago level. By comparison, standard PCE – among the most popular US inflation gauges – notched a 3.6% year-over-year gain in April. Core PCE strips out volatile food and energy prices and is generally viewed as a more reliable measure of long-term inflation.

The disparity reveals the “unprecedented role of outliers” in driving inflation higher, and such an effect should “have only limited effects on longer-term inflation expectations,” the economists said in a note to clients.

“Ultimately, the biggest question in the overheating debate remains whether US output and employment will rise sharply above potential in the next few years,” the team added. “If the answer is yes, then inflation could indeed climb to undesirable levels on a more permanent basis. But our answer continues to be no.”

The forecasts echo sentiments shared recently by central bank officials. Fed Governor Lael Brainard said last week that, as schools reopen and vaccinations continue, it’s likely that the labor shortage will unravel. Job openings sat at record highs by the end of March, and a matching of such huge demand with bolstered supply should drive “further progress on employment,” she added.

More broadly, Goldman expects GDP growth to slow after peaking in the second quarter and normalize as stimulus support lapses. The massive jobs shortfall makes for “significant slack” in the labor market, the bank said, adding that unemployment-based output should reach its maximum potential in late 2023.

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Bitcoin is more like risky digital copper than gold as an inflation hedge, Goldman Sachs’ top commodities analyst says

A pile of bitcoin cryptocurrencies is seen.
  • Bitcoin is closer to “digital copper” than “digital gold”, according to Goldman’s top commodities analyst.
  • That’s because bitcoin and copper act as “risk-on” inflationary hedges, while gold is “risk-off,” he said.
  • Commodities remain the best inflation hedge because they rely on demand, the bank’s research team said.
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Investors should view digital currencies as a substitute to copper, rather than gold, Jeff Currie, global head of commodities research at Goldman Sachs, told CNBC on Tuesday.

“You look at the correlation between bitcoin and copper, or a measure of risk appetite and bitcoin, and we’ve got 10 years of trading history on bitcoin – it is definitely a risk-on asset,” Currie told CNBC’s “Squawk Box Europe.”

He said both bitcoin and copper work as “risk-on” inflationary hedges, or situations where investors have higher risk appetite. Gold is a more “risk-off” asset, where investors seek shelter when stocks are selling off.

Copper prices topped $10,000 a ton for the first time in a decade last month, as economic reopening triggered a rally in the metal. Demand has been surging as it’s seen as a critical component to the transition to a green-energy economy. Although prices suffered a sharp decline towards the end of May, they again rebounded.

Currie’s comments came after a wild few weeks for cryptocurrencies. Bitcoin was last trading 2% higher around $37,190 on Wednesday, and is up about 28% so far this year. The digital token lost more than 25% of its value over the last three months amid a broad crypto sell-off after Tesla suspended bitcoin payments and China announced digital tokens can’t be used for business.

Read More: Financial researcher Nik Bhatia explains why asset managers with a growth focus could be violating their fiduciary duty if they don’t consider bitcoin – and compares the crypto to Amazon’s stock 20 years ago

Currie, who is one of the most widely followed commodity experts, pointed out bitcoin and copper are more similar when it comes to acting as an inflationary hedging – a strategy that involves investing in assets that outperform the market when central bank policy causes prices to rise.

“There is good inflation and there is bad inflation. Good inflation is when demand pulls it, and that is what bitcoin hedges, that is what copper hedges, that is what oil hedges,” Currie told CNBC.

“Gold hedges bad inflation, where supply is being curtailed, which is focused on the shortages on chips, commodities and other types of input raw materials. And you would want to use gold as that hedge,” he said.

In a research note published Monday, Currie and his team said commodities remain the best inflation hedge because they rely on demand, not growth rates. “Commodities are spot assets that do not depend on forward growth rates but on the level of demand relative to the level of supply today,” the strategists wrote.

“As a result, they hedge short-term unanticipated inflation, created when the level of aggregate demand is exceeding supply in the late stages of the business cycle.”

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Warren Buffett dumped Goldman Sachs, JPMorgan, and other bank stocks last year. They’ve now surged to record highs, meaning the investor left billions on the table.

warren buffett
Warren Buffett

  • Warren Buffett might regret dumping bank stocks given their positive outlook.
  • Buffett’s Berkshire Hathaway sold Goldman Sachs, JPMorgan, and most of Wells Fargo.
  • Bank stocks have hit new highs and stand to gain as the economy reopens.
  • See more stories on Insider’s business page.

Warren Buffett might be kicking himself for selling the banks, as their prices have rebounded to pre-pandemic levels and several are flirting with fresh highs.

The famed investor’s company, Berkshire Hathaway, sold its stakes in Goldman Sachs, JPMorgan, M&T Bank, PNC Financial, and Synchrony Financial during the past five quarters. It virtually eliminated its historic Wells Fargo position as well, and trimmed its bets on US Bancorp and BNY Mellon. It only added to a single bank holding in the period, Bank of America.

Buffett dumped the banks because he feared Berkshire was overexposed to the sector and could suffer if the pandemic worsened, he said at Berkshire’s recent shareholder meeting. “We overall didn’t want as much in banks as we had,” he said.

Read more: Warren Buffett has a $80 billion headache when stocks and businesses are this expensive. Here’s a look at the investor’s big dilemma – and the unhappy compromise he’s made.

The investor also pointed out that the banks have the Federal Reserve as a safety net if the financial system freezes up, but Berkshire doesn’t. “It’s up to us take care of ourselves,” he said.

Buffett may be sleeping more soundly, but he missed out on significant gains. For example, Berkshire’s Goldman stake was worth $2.8 billion at the end of 2019; it would have fetched $4.3 billion today. JPMorgan, PNC, and Synchrony are also trading at record levels, while Wells Fargo and M&T have rallied to 15-month highs.

Moreover, Buffett didn’t sell the banks and buy something better instead. He has struggled to find compelling uses for Berkshire’s cash reserves, which exceeded $140 billion at the last count. His company sold about $13 billion of stock on a net basis over the past five quarters, and only spent about $4 billion on acquisitions. In fact, Berkshire’s biggest splurge in 2020 was spending $25 billion repurchasing its own stock.

Read more: Warren Buffett slammed Robinhood, touted tech stocks, and questioned his own holdings at Berkshire Hathaway’s annual meeting. 6 experts explain why.

Buffett risks missing out on further gains too. Bank stocks stand to benefit from the US economy reopening, higher interest rates, a booming stock market, and regulators approving bigger dividends and buybacks in the coming months.

In short, Buffett sold his bank stocks well below their current prices, won’t benefit from any further gains they make in the coming months, and has been earning a meager return on the sale proceeds. His saving grace is Bank of America – Berkshire’s 1 billion shares in the lender have surged in value by 18% since the start of last year to $42 billion today.

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Goldman Sachs breaks down how a worldwide copper-mining shortage could drive parabolic gains in the metal’s price over the next 10 years

chile copper mine
Workers monitor a process inside a plant at the copper smelter of Codelco Ventanas in Ventanas city, Chile, February 15, 2012.

  • Andrew Snowdon of Goldman Sachs broke down how a supply shortage in copper mining projects will propel the metal’s price higher.
  • The firm recently said the metal is “the new oil,” and could reach $15,000 by 2025.
  • Snowdon said mining projects are hesitant to invest in growth, and the copper price will need to soar even higher to change that.
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Goldman Sachs recently published a note declaring copper “the new oil,” and forecasting it could reach $15,000 by 2025 as the world transitions to clean energy.

The firm said copper is the most critical raw material in the world’s path towards net zero emissions because it’s used in everything from electric vehicles to wind turbines and solar power.

In a recent Goldman Sachs podcast episode, Nick Snowdon, one of the researchers, broke down why the soft metal is facing a record supply shortage that will propel the price higher.

“The long-term supply gap in the markets, so when you look forward ten years, that gap currently stands at just over 8 million tons, so nearly 40 percent of the size of the market in terms of the long-term shortfall,” said Nick Snowdon. “That’s larger than anything we’ve seen in the history of the copper market.”

The market will need an enormous number of copper mine projects approved to meet demand, he said. He stressed that the shortage of supply isn’t in copper itself, but in mining projects.

“There is enough copper out there. This isn’t a story of the depletion of copper ore. But there is a very limited list, currently, of copper projects,” Snowden said.

Snowdon said the supply side is completely underprepared for the demand surge in copper that is set to come as countries move towards renewable energy initiatives. Over the last 12-18 months, he said hasn’t seen a single new major copper project being approved.

“Essentially we’re sleepwalking to huge deficits and scarcity. And prices will have to rise even higher than is currently our base case,” Snowdon said.

One reason for the mining-supply shortage is because the mining sector has been in a very conservative setting in terms of its balance sheet activity, said Snowdon. The sector hasn’t invested in early stage project development and so now, the quality of projects compared to 10 years ago is “very poor,” the researcher said.

Even now, record price levels haven’t caused a shift in supply investment like one might expect, he added.

That’s because in the early 2010’s, the mining sector invested heavily in projects, only for the price in copper to collapse shortly after, punishing any producer who invested heavily in new projects.

“That memory lingers really amongst the current generation of producer management,” Snowdon said.

He also explained that ESG initiatives slow down the process of getting a mining permit approved. Additionally, the coronavirus created operational challenges in copper mining.

Snowdon said right now, the quality of mining projects is lower and the costs are higher, and the price of copper will need to move up even further before there’s an incentive to invest in more projects.

“It’s not an easy proposition of saying, “Okay, let’s just invest in growth,” because the economics are not as attractive as they were if you go back to the mid/late 2000s,” said Snowdon.

He continued: “So, I think all of those are combining to generate this restraint. And really, the only thing that can break that has to come from price dynamics and an incredibly high price. And we don’t think the current price is, yet, at the level to generate that shift.”

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Goldman Sachs is going through a massive transformation under CEO David Solomon

Goldman Sachs CEO David Solomon
Goldman Sachs CEO David Solomon.

  • Goldman Sachs CEO David Solomon is taking big steps to transform the bank.
  • Goldman has been pushing into consumer banking and wealth management.
  • But a slew of partners have jumped ship, and Marcus has seen a big talent exodus.
  • Visit the Business section of Insider for more stories.

Goldman Sachs is going through some big changes under CEO David Solomon.

The Wall Street bank has taken steps involving transparency and inclusion to change up its culture. After its first-ever investor day in early 2020, the firm is executing on targets including multi-year cost-cutting plans. And it’s making big pushes into wealth management and consumer banking.

Goldman smashed expectations and set a revenue record in the first quarter, and its stock price has soared. Investors and Wall Street analysts are singing Solomon’s praises.

But the firm’s top ranks have seen almost unprecedented turnover, with six members of the management committee departing over the past year.

And junior bankers have been so overworked that they put together two presentations to express their unhappiness to management. Engineers in a consumer division that Goldman spent billions to build have quit in droves.

Here’s a rundown of the must-know news at Goldman, including the latest hires and exits, as well as deep dives on its Marcus consumer bank and wealth-management push.

Who are the top leaders at Goldman?

Goldman Sachs org chart 2x1

Goldman in September shuffled its setup, creating a new standalone consumer division that includes its Marcus lending unit as well as its wealth-management and private-banking businesses.

Strategy chief Stephanie Cohen and Tucker York, the head of the private-wealth business, were tapped to colead the new consumer and wealth management division and the changes went into effect on Jan. 1.

The new setup matches the way Goldman reports financial results, a change the firm made in 2019 to better align with how Solomon wanted investors to think about the firm. Goldman now has four divisions: consumer and wealth management, asset management, investment banking, and global markets.

Read more:

The lastest news on Goldman’s Marcus

Marcus Goldman Sachs
Marcus offers savings and credit products online and through its app.

Goldman Sachs has built its consumer-banking arm into a $1 billion business over the past five years.

But it’s seen a wave of recent departures including the exits of top Marcus bosses Omer Ismail and David Stark. And JPMorgan has poached the head of product at Marcus to join the bank’s digital and product leadership team for consumer and community banking, while CNBC first reported in May that Sherry Ann Mohan, chief financial officer for Goldman’s consumer business, is leaving to serve as CFO of JPMorgan’s business banking division beginning in August.

Insiders explained how Goldman Sachs’ hard-charging culture had contributed to exhaustion and high turnover within Marcus, and a Goldman spokesperson told us that the firm is eyeing beefing up the ranks by hiring some 200 to 300 new engineers.

Read more:

Goldman’s wealth-management push

Meena Flynn and John Mallory of Goldman Sachs
Meena Flynn and John Mallory co-head the private wealth business at Goldman Sachs.

Goldman, a firm synonymous with enormous wealth, has in recent years tried to reshape itself as a bank that can count someone with just $1,000 to invest as a client just as it has long done business with large companies and the very wealthy.

It launched Marcus Invest, a robo-advisor with a $1,000 minimum, earlier this year. And it has reorganized how its wealth businesses are situated entirely, creating a new internal consumer and wealth management division that went into effect at the start of this year. Goldman has some 800 advisors within private wealth globally.

Goldman’s dealmakers

When Goldman announced its latest class of partners, one group was particularly well-represented on the list. Seven of the 19 investment bankers elevated to partner status came from the bank’s powerhouse technology, media, and telecommunications group.

The group has also seen some shakeups in recent months. Goldman Sachs veteran Gregg Lemkau, co-head of the firm’s investment banking division since 2017 and a member of Goldman’s management committee, left at the end of 2020. Instacart has tapped Nick Giovanni, Goldman Sachs’ head of the global technology, media and telecom group, to be its CFO. And in September, Goldman Sachs named new leadership in its M&A group.

Goldman has also been riding the SPAC boom, which went into overdrive in the first quarter. It ranked No. 2 among banks in terms of SPAC IPOs year-to-date by mid-March.

Read more:

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A Goldman Sachs managing director reportedly quit after raking in huge gains from dogecoin

Dogecoin icon on the phone
Dogecoin has skyrocketed in 2021.

A Goldman Sachs managing director quit after making millions of dollars in profit from the meme currency dogecoin, eFinancialCareers reported on Monday.

The executive, Aziz McMahon, has been with the bank’s London bureau for 14 years, according to his LinkedIn profile.

Goldman confirmed McMahon’s departure but did not provide a reason. McMahon did not immediately respond to Insider’s request for comment.

Sources told eFinancialCareers that he might be starting a hedge fund.

Dogecoin, a Shiba Inu-themed token that started as a joke in 2013, has skyrocketed by 10,300% year-to-date, thanks in part to well-known backers such as Elon Musk, Mark Cuban, the rapper Snoop Dogg, and the Kiss member Gene Simmons.

Because of dogecoin’s wild price swings, many people have reported profiting from the meme token, mostly younger retail investors with a higher risk appetite.

As investors have pumped more cash into dogecoin, the token has become the world’s fifth-largest cryptocurrency by market capitalization, hovering at about $63 billion on Monday, according to CoinGecko.

Over the weekend, dogecoin tumbled by 30% after Musk’s “Saturday Night Live” appearance, during which he called the meme token a “hustle,” said it was “as real” as a dollar bill, and predicted it would “take over the world.”

It’s unclear what McMahon will do, but several executives from traditional banking and finance institutions have jumped to the cryptocurrency space: John Dalby, Bridgewater Associates’ chief financial officer, joined the crypto firm NYDIG, while Christopher Giancarlo, the former chairman of the US Commodity Futures Trading Commission, joined the crypto financial-services firm BlockFi.

Read more: Fundstrat’s head of digital assets research walks us through his $100,000 and $10,500 year-end price targets for bitcoin and ether – and shares the 8 tokens he’s bullish on

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Goldman Sachs announces a new crypto trading team in an internal memo

David Solomon
Goldman Sachs CEO, David Solomon.

Goldman Sachs formally announced the launch of its newly-formed cryptocurrency trading desk to markets employees, according to an internal memo obtained by Insider.

The team has successfully executed two types of bitcoin-linked trades – bitcoin non-deliverable futures and CME BTC futures, the bank said.

Members will report to Goldman partner Rajesh Venkataramani. It will function as part of the bank’s global currencies and emerging markets trading team within a division led by the global head of digital assets, Mathew McDermott.

Goldman had been weighing plans to create a crypto trading desk as early as 2017, according to CNBC. Thursday’s memo is the first time the US bank has formally acknowledged its involvement in the reported plans.

It plans to broaden its market presence by “selectively onboarding” crypto trading institutions to expand offerings, according to the memo.

CEO David Solomon said last month he expects a “big evolution” in the way bitcoin and other cryptocurrencies are regulated in the United States. “I’m not going to speculate on where the rules will go for regulated financial institutions, but we’re going to continue to find ways to serve our clients as we move forward,” he told CNBC in an interview.

A copy of the internal memo obtained by Insider is seen below:

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 a 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 Crypto Currency (inc. Ethereum) on a physical basis.

Rajesh Venkataramani

CNBC first reported the bank’s announcement.

Other large investment banks are also warming up to cryptocurrencies. JPMorgan, the largest US investment bank by assets, is actively working on offering a bitcoin fund to its private rich clients. Citi plans to launch crypto trading services after seeing surging interest from clients, according to the Financial Times.

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Goldman Sachs is offering bitcoin derivatives to investors as it expands its offerings in the $1 trillion market

2021 05 04T135232Z_402274817_RC219N9B0H4S_RTRMADP_3_CRYPTOCURRENCY DOW JONES.JPG
Representations of virtual currency bitcoin are placed on US dollar banknotes taken May 26, 2020.

Goldman Sachs on Thursday began trading non-deliverable forwards, a derivative product tied to bitcoin‘s price, Bloomberg Law reported.

An NDF essentially allows investors to speculate on bitcoin’s future price. It is settled with cash and is usually a short-term, forward contract.

Goldman can protect its clients from the volatility of bitcoin’s price by buying and selling bitcoin futures in block trades on CME Group, using Cumberland DRW as its trading partner, Bloomberg Law reported.

The bank first announced its intention of dealing with bitcoin futures and NDFs in March.

Goldman also in the same month restarted its cryptocurrency trading desk amid a booming cryptocurrency market. It first set up a cryptocurrency desk in 2018.

Bitcoin, since its inception in 2009, has long been shunned by Wall Street firms until recently.

In March, Morgan Stanley became the first major American bank to offer its wealth management clients access to bitcoin funds, allowing clients ownership of the cryptocurrency.

JPMorgan followed in April when it announced that its plans to offer an actively managed bitcoin fund to wealth clients for the first time.

Banks are still moving cautiously when it comes to holding bitcoin outright due to regulatory intricacies. This is why some have resorted to derivatives.

Bitcoin has seen a 91% gain year-to-date. It briefly breached a record high over $64,000 ahead of cryptocurrency exchange Coinbase’s direct listing, then plummeted by around 36% to $47,000 around 10 days later.

It is trading lower by 1.07% to $55,905 as of 4:15 p.m. ET.

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