Goldman Sachs made some big waves within the world of crypto, deciding recently to hire the first member of a new cryptocurrency trading desk.
Justin Schmidt will be the first head of digital asset markets in Goldman’s securities division.
Schmidt’s previous stops on Wall Street include the quantitative trading firms Seven Eight Capital LLC and WorldQuant LLC.
Schmidt also has a computer science degrees from the Massachusetts Institute of Technology, according to his LinkedIn profile. His profile page lists “Crypto” as his current role.
“In response to client interest in various digital products, we are exploring how best to serve them in the space,” Goldman Sachs spokeswoman Tiffany Galvin-Cohen said in a statement.
“At this point, we have not reached a conclusion on the scope of our digital asset offering,” she continued.
There have been rumors about Goldman’s strategy for crypto-related offerings since December. It was at that time that major news outlets began reporting planned to launch of a crypto trading desk.
Crypto media outlets tried to debunk that story. They insisted the the bank already had one.
Goldman Sachs has continually denied these stories, though according to some analysts they would have been wise not to.
“The job of a bank’s trading desks is to help their clients trade the financial stuff that they want to trade,” Matt Levine wrote on Bloomberg News last week.
“If the sorts of customers who are banks’ customers want to trade a thing, then that thing becomes a financial thing, and so the banks had better start helping them trade it.”
Crypto 2018
Goldman’s current involvement in crypto assets is as a facilitator rather than a market maker. It offers clients exposure to Bitcoin through futures contracts offered on the Cboe Global Markets and CME Group exchanges.
Galvin-Cohen confirmed that Goldman Sachs is not active on any cryptocurrency exchanges.
There is also a high level of regulatory interest in crypto assets. The Securities and Exchange Commission (SEC) currently views and treats cryptocurrencies the same way it does securities.
It is unclear when or if this will change.
Last month, however, the SEC said it’s looking into applying securities laws to both cryptocurrency exchanges and cryptocurrency wallets.
Barclays in the U.K. said last week that it’s similarly monitoring developments in the cryptocurrency space. It is currently gauging interest in whether clients would want the bank to launch a crypto trading desk.
At this time, however, Barclays it has no material plans to do so.
