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According to a Goldman Sachs Executive, the investment giant will soon be offering futures and options trading in Ethereum.
Matthew McDermott, head of digital assets at the firm spoke to Bloomberg about the hunger for cryptocurrency futures as Bitcoin has recently dropped in price and making it a bargain. Goldman Sachs is set to build on its existing crypto options having previously allowed their clients to deal in publicly traded futures tied to Bitcoin and investing in a number of crypto start-ups.
McDermott said:
“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.”
Ethereum futures markets account for a daily combined volume of $23.9 billion. For traders, these futures contracts are an attractive proposition to capitalize on a golden opportunity in the crypto market.
The past year, investment banks and mainstream financial institutions have gradually started offering its clients some exposure to cryptocurrency. This in response to the growing demand for cryptocurrency products.
It was Morgan Stanley that kicked things off in March of this year by becoming the first big U.S bank to enable its clients access to Bitcoin funds. Wall Street, historically shunning crypto assets, have seen change of heart this year with many other institutions taking after Morgan Stanley. Goldman Sachs has 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.”
Goldman Sachs venturing into Ethereum futures is promising for cryptocurrency and its adoption. Nonetheless, Goldman Sachs is still limiting its investors to an investment cap of 2.5% of their total net worth.
Goldman Sachs have proven to be one of the progressive bankers when it comes to cryptocurrency, keeping a close eye to developments while taking very customer centric approach and listening to its clients. Chief Executive Officer, David Solomon not so long ago said that a “big evolution” is coming with regards to regulation of cryptocurrencies in the United States.