A Goldman Sachs Executive has revealed that the investment giant will soon be offering futures and options trading in Ethereum.
Goldman Sachs is set to build on its existing crypto options according to their head of digital assets, having previously allowed their clients to deal in publicly traded futures tied to Bitcoin, and investing in a number of crypto start-ups.
As the Ethereum futures market has a daily volume of $23.9 billion, Ethereum futures contracts are an attractive proposition for traders that look to capitalise on a betting opportunity in the crypto market.
Cryptocurrency offerings by investment banks and mainstream financial institutions are on the rise, with Goldman Sachs as well as other investment bodies responding to the demand for cryptocurrency products.
Mathew McDermott, head of digital assets at Goldman spoke to Bloomberg about the appetite for cryptocurrency futures, particularly now the price of Bitcoin has dropped:
“We’ve actually seen a lot of interest from clients who are eager to trade as they find these levels as a slightly more palatable entry point. We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”
Morgan Stanley started the ball rolling in March of this year, when they became the first big U.S bank to enable access to Bitcoin funds. Wall Street has historically shunned crypto assets, however in the past year the financial sector has had to step up to the demands from their clients. Goldman Sachs only recently changed its position on cryptocurrency, and in May this year it officially referred to Bitcoin as an asset class:
"Bitcoin is now considered an investable asset. It has its own idiosyncratic risk, partly because it’s still relatively new and going through an adoption phase... But clients and beyond are largely treating it as a new asset class, which is notable—it’s not often that we get to witness the emergence of a new asset class."
The latest reports that Goldman will be extending its futures contracts to include Ethereum, is promising for the cryptocurrency, and bodes well for the overall adoption of cryptocurrency. A Goldman Sachs research report leaked on Twitter in May, detailing how the use cases of Ethereum will lead to it overtaking Bitcoin. Despite these revelations, Goldman Sachs is still limiting its investors to an investment cap of 2.5% of their total net worth.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.