Bloomberg recently reported that Goldman Sachs is planning to become one of the first mainstream financial institutions to custody cryptocurrency assets. The report does seem true because Bloomberg cited several anonymous sources that were familiar with the matter. Some were even involved in the discussions that they were holding regarding the matter.
And if they do launch such a service, this would remove a major obstacle that major institutional investors such as pensions and endowments were facing that made them feel uncomfortable from getting exposure to cryptocurrency. Not only that, this would also be a major boon for the cryptocurrency funds itself.
Custody Services Do Exist, But Not At This Level
This is not something new. Custody services do exist, it’s just that it is not offered by Wall Street giants that institutional investors like to work with. Cryptocurrency startups like Coinbase do offer such services.
But if Goldman Sachs is offering the same service, an investor would be much more comfortable going with them.
However, Goldman Sachs is just exploring the idea of launching the service. The Bloomberg report cited a spokesperson for Goldman Sachs saying “In response to client interest in various digital product we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.”
The interesting thing about that line is that Goldman’s spokespeople have used it in earlier reports as well when they were planning to launch a bitcoin trading desk. And just days before the launch of bitcoin trading desks, they used the same line until they finally announced that they have hired Justin Smith, a cryptocurrency trader to head its digital asset division.
I think that it would play out the same way.
There’s good news all around for cryptocurrency as Wall Street is warming up to bitcoin. Because on August 3 we reported that Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE) is planning to launch a company called Bakkt to make bitcoin a mainstream asset. This was a major push in the right direction to help the world’s most valuable cryptocurrency mature much faster and become a reliable financial instrument.
Through Bakkt, investors will be able to receive actual BTC when the one-day contracts settle rather than receiving cash.