Source: Goldman Sachs is restarting its cryptocurrency trading desk amid the crypto boom and will begin dealing bitcoin futures and more starting next week
Context & Ripple Effects
Goldman Sachs had explored a crypto desk in 2017 and planned to trade bitcoin futures with its own capital in 2018, before reportedly shelving the effort amid regulatory uncertainty. The restart reverses that 2018 retreat from a planned crypto desk and turns its earlier bitcoin-futures trading plan into an operating business.
The significance is not merely renewed interest in crypto: Goldman is moving from a proposed desk to a product-dealing operation, creating a base for the bitcoin-linked derivatives activity reported later in 2021.
First-order effects
- Goldman Sachs’s markets operation begins dealing bitcoin futures and additional crypto products, putting the firm back in the market it had previously deferred.
- The firm must operationalize trading, risk management and product support for the desk rather than treating crypto as a prospective initiative.
Second-order effects
- The broader product mandate creates a path beyond futures into bitcoin-linked derivatives, consistent with the later report that Goldman’s new desk traded two types of bitcoin-linked derivatives.
- Goldman’s renewed participation gives its existing and prospective counterparties a large-bank venue for the products the desk is prepared to deal.
Third-order effects
- If the progression from futures and derivatives continues, Goldman’s crypto activity can extend from market access into financing, as indicated by its later bitcoin-collateralized cash-loan offering.
- The arc points to crypto becoming a set of connected trading and credit products inside established financial firms, rather than a standalone experimental desk.
The trend: Goldman Sachs’s return to crypto dealing is part of a shift from exploratory bank crypto initiatives toward integrated trading, derivatives and lending services.