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| Goldman Sachs is back in cryptocurrency trading |
Investment bank Goldman Sachs has resumed its cryptocurrency trading division and will begin trading bitcoin futures and non-delivery futures contracts to clients starting next week.
The team should be based in the Global Markets division of Bank of America.
The cryptocurrency trading desk is part of Goldman Sachs' fast-growing digital asset business, which also includes projects involving blockchain technology and central bank digital currencies.
As part of this work, the bank is also looking into the possibility of establishing an ETF on the Bitcoin exchange and has filed a request for information to investigate the security of digital assets.
Institutional interest in Bitcoin increased day by day and the trading desk was restarted. Over the past year, Bitcoin has grown by more than 470%.
As the government and central bank release stimulus packages, investors and some companies are looking at the largest cryptocurrency as a hedge against inflation.
Although the price has risen sharply over the past year, Bitcoin is still very volatile. The virtual currency surpassed $ 58,000 on February 21, then declined 25% but made up for some losses.
This makes the currency and its associated derivatives attractive for high-risk long or short trades for investors who want to achieve returns in a historically low interest rate environment.
A non-deliverable future contract is a derivative that allows investors to see future prices of Bitcoin.
Goldman Sachs first set up a cryptocurrency bureau in 2018 when the bitcoin price fell from an all-time high, dampening investor interest in cryptocurrencies.
Since then, the market infrastructure of Bitcoin and other major cryptocurrencies has matured significantly, and several well-known financial institutions, including CME Group, Intercontinental Exchange and Fidelity, offer products and services.
The developments have attracted more traditional companies in the industry, from companies that provide crypto services to individual or institutional investors to companies that keep bitcoin on their balance sheets.
Electric vehicle maker Tesla announced last month that it had bought $ 1.5 billion of Bitcoin, while investment bank BNY Mellon created a new division to help customers retain and transfer digital assets.