Goldman Sachs Creates a Cryptocurrency Markets Unit

Goldman Sachs has enlisted a former trader to head a digital assets unit as the company prepares to enter the cryptocurrency market. The new hire Justin Schmidt started his role on April 6 under the Securities division.

He now becomes the VP and head of the digital assets markets. It is one of the surest signs yet the firm is finding ways to give its customers exposure to cryptocurrencies.

Goldman Sachs

“In response to client interest in various digital products, we are exploring how best to serve them in the space,” Tiffany Galvin-Cohen, a spokeswoman for the company said.

However, she noted that the firm had “not reached a conclusion on the scope of our digital asset offering.”

Justin Schmidt is a former vice president at Eight Digital, a quantitative trading firm. His LinkedIn profile also shows he has been a quant trader.

Crypto Trading Desk

Bloomberg has previously reported that the bank was planning to set up a crypto trading desk. Goldman Sachs has however consistently denied the reports.

Goldman Sachs has invested in Circle, a major liquidity provider of digital assets and cryptocurrency in the world. The platform recently raised its minimum bitcoin ticket price from $250,000 to $500,000. Circle characterises the market as robust despite a sustained decline in recent months.

Clearing Services

Goldman Sachs currently offers cryptocurrency exposure to its customers through the CBOE and CME bitcoin futures launched in late 2017. Its role is however limited to offering clearing services rather than being a market marker. It can therefore only place orders for crypto on exchanges on behalf of its customers.

Regulatory uncertainty remains a major hurdle for institutions seeking to enter the market. The Securities and Exchange Commission is yet to clearly spell out how it plans to regulate the sector. It has however given indications that cryptocurrencies will be treated as securities.

More financial institution are expected to make their way as regulations become more clear.
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