Banking giants Goldman Sachs and Citi are loosening up for Bitcoin services
With Bitcoin’s seemingly invincible rise, traditional banking institutions have no other option but to offer Bitcoin services to their clients. Two U.S. banking giant’s Goldman Sachs and Citi Group have now announced offering Bitcoin derivative products and custodial services to its clients.
Goldman Sachs
After recently having opened up its Bitcoin trading desk, Goldman Sachs is now going after the big spenders.
As Bloomberg is reporting, Goldman has begun using so-called “non-deliverable forwards.” These are short-term futures contracts that pay out cash to investors who can accurately predict the future price of Bitcoin. It is quite simple. Two parties agree to a price and when the contract expires, the winning party earns the difference between the agreed price and the actual price.
As per the announcement, Goldman positions itself to make money off of one of Bitcoin’s seemingly negative aspects: volatility, and shielding itself of from it. The price of Bitcoin has yo-yoed between an all time high of over $63,000 and a price just below $50,000 in the last month. Currently the cryptocurrency is neatly priced in the middle at around $56,000.
Goldman will be buying and selling CME Bitcoin futures in block trades in partnership with Cumberland DRW. In response to Bloomberg, Max Minton, Goldman’s Asia-Pacific head of digital assets said:
“Institutional demand continues to grow significantly in this space, and being able to work with partners like Cumberland will help us expand our capabilities. The new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities.”
Goldman’s partnership with Cumberland DRW is a clear indication that the bank is willing to work with third-party players to make the most of the market opportunity and demand.
Back in April during an earnings call, Goldman Chief Executive Officer David Solomon had stated that the firm was closely watching Bitcoin and its regulatory waters.
Citi Group
Simultaneously, big player Citi Group is setting itself up to offer Bitcoin trading and custodial services to its clients. Citi’s global head of foreign exchange Itay Tuchman was quoted in the May 7 edition of The Financial Times and said:
“The new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities.”
Nonetheless, the Citi executive did reiterate that the bank will not be rushing to offer Bitcoin and crypto services. All regulatory hurdles will be considerated to assure full compliance prior to jumping into the game. Tuchman said:
“I don’t have any FOMO [fear of missing out] because I believe that crypto is here to stay and that we are just at the very beginning of the market. This isn’t a space race. There is room for more than just one flag.”
News from these top institutions comes just a day after NYDIG announced that hundreds of U.S. banks will start offering its clients the possibility to buy, hold and sell Bitcoin through their existing accounts.
The post Banking giants Goldman Sachs and Citi are loosening up for Bitcoin services appeared first on iGaming.
Source: igaming
