Bitcoin’s recent historic surge will not only be remembered for the historic highs, but for the number and the size of Wall Street players that joined the cryptocurrency bandwagon.
Goldman Sachs (NYSE: GS), a New York-based investment bank with 2.1 trillion in assets under management (AUM), is restarting its cryptocurrency trading desk and will start dealing bitcoin futures and non-deliverable forwards for clients in the coming week, Reuters reported.
Goldman Sachs back in crypto
According to the person familiar with the matter, the desk is part of the investment bank’s activities within the once-shunned-but-now-booming cryptocurrency sector.
The desk will also handle projects involving blockchain technology and central bank digital currencies (CBDCs).
The bank is also looking at the potential for a bitcoin exchange-traded fund (ETF) and is already inquiring about the custody of digital assets.
Goldman Sachs first set up the desk in 2018, during the long-protracted bear market that left investors reeling and others lost their appetite for the industry.
Since then, the market has matured and several established financial institutions are now venturing into bitcoin.
Wall Street embraces bitcoin
Fidelity, New York Stock Exchange (NYSE) parent company Intercontinental Exchange, and CME Group are some of the big names to join the crypto bandwagon.
These developments have played a crucial role in attracting more mainstream companies to the sector, giving the young market a credible and legitimate leg to stand on.
Institutional investors and large companies are taking turns to convert their balance sheets into bitcoin, while some companies are extending their services to include crypto.
PayPal, a leading financial services company, now allows its clients to buy, sell, and hold digital currencies.
Other large banks are also joining the crypto crusade, with some of them urging their investors to bet on bitcoin, albeit cautiously.
JPMorgan: invest 1% in bitcoin
JPMorgan strategists said investors should allocate 1% of their portfolio to bitcoin. In recent times, analysts have been praising bitcoin for its hedging capability.
The digital asset has been on a tear for the past few months and has set record-after-record. Bitcoin reached a market capitalization of $1 trillion last month, though it has lost more than $100 billion since then after a price slump.
Unlike the previous bull cycle of 2017 that was immediately followed by a bear market, the current bull trend is said to be more sustainable due to the continued inflow of institutional capital.