Big Banks Ramp Up Crypto Exposure

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  • Two more big banks have announced intentions to open themselves up to the cryptocurrency space
  • Goldman Sachs announced a cash-settled Bitcoin derivatives platform
  • Citigroup suggested that huge demand was causing them to consider offering a crypto service

The march of big banks toward cryptocurrency continued this week with a double bill of news that shows that more and more institutions are finally seeing the light. On Thursday Goldman Sachs announced a plan to offer Bitcoin derivatives to its investors, followed the day after by Citigroup admitting that it was considering crypto services following a “very rapid” growth in interest in the cryptocurrency sector. The twin developments add those two names to the growing list of big banks dipping their toes in the cryptocurrency pool.

Goldman Sachs Offers Bitcoin Derivatives

Goldman Sachs was famously one of the first big banks to show an interest in crypto when they considered a crypto trading desk at the peak of the 2017 bubble. This talk was resurrected in March, and the bank has now taken things a step further and, according to Bloomberg, opened cash-settled Bitcoin derivatives to Wall Street. The site reported Max Minton, Goldman’s Asia-Pacific head of digital assets, as saying that “Institutional demand continues to grow significantly in this space” and that the new offering is “paving the way for us to evolve our nascent cash-settled crypto-currency capabilities.”

Citigroup Poised to Enter Crypto Market

Less than 24 hours later it was reported that Citigroup was the latest of the big banks considering getting in on the act, with global head of foreign exchange Itay Tuchman telling the crypto-hating Financial Times that “trading, custody and financing were all under consideration” thanks to unprecedented demand from clients. This move comes weeks after Citigroup released a report that noted Bitcoin could be “optimally positioned to become the preferred currency for global trade”.

Big Banks Forcing The Issue

Tuchman added that he believed that “crypto is here to stay and that we are just at the very beginning of the market”, something that the Financial Times reporter must have had a nervous breakdown in typing given the lengths to which the newspaper has gone to denigrate cryptocurrencies in recent months. However, they may be forced to change their tune as the big banks they report on, and whose employees make up their readership, begin to gravitate toward the space.