Capital markets News

Goldman Sachs to offer bitcoin to wealthy clients

bitcoin cryptocurrency

Yesterday CNBC reported that Goldman Sachs plans to offer its wealth management clients exposure to Bitcoin. It will provide a variety of ways to invest, “whether that’s through the physical bitcoin, derivatives or traditional investment vehicles,” said Mary Rich, who heads up digital assets for Goldman’s wealth management division.

These aren’t your average investors, as these families and endowments need to have a minimum of $25 million in assets. CNBC said that Goldman is in the process of getting regulatory approval. Two weeks ago, Morgan Stanley said it would enable its clients to invest in Bitcoin via two Galaxy Digital funds and an FS NYDIG Select Fund.

Goldman already reopened its crypto trading desk on the institutional side, which it shuttered in 2018 after the last boom subsided. It recently surveyed 300 institutional clients and found that 40% already had cryptocurrency exposure.

As we previously noted, the Goldman institutional trading desk will focus on CME futures and non-deliverable forwards. Regulatory uncertainty means banks won’t trade actual coins, but that’s where the demand is from hedge funds and asset managers.

“So, that’s been something that we’ve had to think cleverly (about) how we can facilitate that demand in a different way,” said Mathew McDermott, Goldman’s enterprise-wide head of digital asset. “In Asia, for example, there are certain jurisdictions where that is permissible, where you can trade the physical.”

Various institutions around the world are starting to offer digital assets to clients. Private Swiss banks such as Julius Baer were the earlier movers going live with offerings to wealthy clients at the start of 2020. December of that year saw a bevy of institutions unveil solutions, including DBS Bank in Singapore and  BBVA Switzerland targeting accredited investors and Standard Chartered and Northern Trust collaborating for digital asset custody.

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