A ‘Significant Amount of Interest’ Pushes Goldman Sachs to Offer Ether Options & Futures Trading
Mathew McDermott, head of digital assets at the bank, said clients are eager to trade crypto assets at current prices, which are currently at a “more palatable entry point” following the “cleansing exercise” in terms of leverage reduction.
Goldman Sachs Group is expanding into Ether.
The banking giant is now planning to offer futures and options trading in Ether, the second-largest cryptocurrency, in the coming months, according to Mathew McDermott, head of digital assets at Goldman.
Currently trading above $2,600, the $300 billion market cap cryptocurrency is still up 254% YTD after experiencing a drawdown of 60% from its all-time high of $4,380 last month.
The recent sell-off in the crypto market has resulted in the activity falling significantly, which has the average fees on the Ethereum Network at about $3 after going for $100 towards the end of May.
Since last month, the market has been in a deep rut; it makes sense that it will take time to attract interest again.
— Alex Krüger (@krugermacro) June 15, 2021
Meanwhile, it was only this year that the bank restarted its trading desk to help clients trade futures tied to Bitcoin. McDermott said Goldman also plans to facilitate trades via exchange-traded notes tracking Bitcoin. BTC -0.94% Bitcoin / USD BTCUSD $ 40,116.98
-$377.10-0.94% Volume 40.11 b Change -$377.10 Open $40,116.98 Circulating 18.74 m Market Cap 751.63 b
6 h SEC’s 2021 Regulatory Agenda Does Not Include Bitcoin or Crypto 7 h Bitcoin Has Only Been This ‘Cheap’ Relative to Trend 20.3% Of The Past Eleven Years: Pantera Capital 8 h To Acquire Even More Bitcoin, MicroStrategy will Now Sell up to $1 Billion of its Shares
“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,” McDermott told Bloomberg in an interview on Thursday.
“We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”
McDermott joined Goldman last year as the head of its digital currency efforts, and under him, the business has grown from four to 17 people. This year, the bank also invested in crypto start-ups. Last month, Goldman led the $15 million investment into Coin Metrics, and this month it put $5 million into Blockdaemon.
“We are looking at a number of different companies that fit into our strategic direction.”
In his interview, McDermott said his conversations with clients show that digital currencies aren’t just a fad. In a survey of 850 institutions last week, Goldman found that close to one in 10 are trading crypto, and 20% are interested in it. He said,
“Institutional adoption will continue. Despite the material price correction, we continue to see a significant amount of interest in this space.”