American banking giant Goldman Sachs has officially confirmed its plans to revive a cryptocurrency trading desk amid increasing demand from investors.
Matt McDermott, global head of digital assets for Goldman Sachs' global markets division, announced that the company will provide access to CME Bitcoin (BTC) futures on its upcoming crypto platform. In a Friday Exchanges at Goldman Sachs podcast, the executive also noted that Goldman Sachs will offer crypto services with non-deliverable forwards, or NDFs, which are cash-settled, and usually short-term, forward contracts.
McDermott noted that initially Goldman Sachs’ crypto platform will be limited to these two products, stating:
“We’re actually going live with that crypto trading desk, which would be quite narrow initially, but we will focus on CME futures and non-deliverable forwards. And we’re also now disseminating Bitcoin content to our institutional clients through our Marquee platform.”
According to McDermott, Goldman Sachs’ move into crypto comes in response to the increasing demand from its clients. Citing an internal survey of nearly 300 clients, the executive said that 40% of Goldman Sachs’ investors currently have exposure to crypto. “That seemed actually a little high to me, but I felt that was kind of very reflective of the demand we’ve seen over the last three to six months,” he said.
The executive also reported that 61% of Goldman Sachs’ surveyed clients expect digital-asset holdings to increase over the next year. Particularly, 76% of those surveyed see Bitcoin ending 2021 between $40,000 and $100,000, McDermott said. However, only 22% expect Bitcoin to surpass the $100,000 mark by the end of 2021, he noted.
Goldman Sachs originally wanted to set up a crypto trading desk in 2018, announcing the plan in late 2017. At the time, Bitcoin was sitting at its former all-time high levels after hitting $20,000 in December 2017. Following a subsequent sell-off on crypto markets in 2018, Goldman Sachs was rumored to have canceled its crypto desk plans. Eventually, Goldman Sachs CEO David Solomon strongly refuted that the bank ever had plans to open a crypto trading desk in 2019.
In the latest interview, McDermott pointed out that the existing crypto landscape is very much different than 2017 in terms of growing institutional demand. “2017 was very much a retail-driven market. This time around, we’ve seen a huge volume of institutional demand across a broad spectrum of different industry types,” he said.