In efforts to meet the increasing client demand, Goldman Sachs earlier this year confirmed their plans to launch a trading desk for Bitcoin futures. And this week, the firm has said they are considering offering custodial services for cryptocurrency funds.
With the current burgeoning world where the number of resources betting on several types of cryptocurrencies growing larger by day, Goldman Sachs believes that it can effectively enhance the current crypto market.
Embracing New & Emerging Market
According to Bloomberg, the company is exploring a custody offering for digital currency funds. It is for this reason that the investment bank decided to hold innovative securities on behalf of the funds.
For Goldman Sachs, this custodial service means that the bank would hold the digital currencies on behalf of the funds, offering security for client capital from cyber theft and hacking.
In fact, the whole idea is to minimize the risk for clients who are skeptical of cryptocurrencies for fear of rogue attacks.
If successful, this would make Goldman Sachs the first leading financial institution to back cryptocurrency funds—theoretically drawing a flood of institutional capital to the industry.
The firm is yet to announce the official launch date of the custody offering. And as Bloomberg highlights, launching a custody operation could result in more institutional solutions for cryptocurrency investment, like prime-brokerage services.
In an exclusive interview with Bloomberg, a Goldman Sachs spokesperson outlined that significant customer interest in several digital products has led the institution to consider exploring the best ways to serve them in this field. He, however, outlines that they are yet to decide on the precise scope of their cryptocurrency offering.
Wall Street Institutions Venture into Crypto
As aforementioned, Goldman Sachs confirmed in May of this year their plans of launching a Bitcoin futures trading desk aimed at meeting the resurgent client demand. A month later, the investment group announced their plans to move further into the cryptocurrency realm.
Back in June, Goldman Sachs COO David Solomon said the firm is on the verge of clearing Bitcoin futures as well as discussing venturing into other closely allied activities—although at a cautious pace.
According to him, the firm is focusing on heeding to their clients’ needs about the different activities while also trying to help them in their quest to explore these opportunities.
Similarly, at the beginning of 2018, Morgan Stanley also started to clear Bitcoin futures contracts. Last month, Coinbase also launched its custodial service for institutional investors known as Coinbase Custody. Soon after, the startup secured a hedge fund worth $20 billion courtesy of its prime broker to offer institutional investors access to an assortment of financial services, including margin financing.
Additionally, earlier this summer, a Bitcoin ETF application submitted an application to the Securities and Exchange Commission by Cboe Futures Exchange.
In the wake of regulated security token markets and digital asset derivatives, it is undoubtedly clear that an increasing number of top investment companies are preparing institutional opportunities for the evolving digital economy. As it seems, it is only a matter of time until the deliberations may turn into reality.