Goldman Sachs, an American multinational bank, is changing its mind: Bitcoin alone is not enough, we need Ethereum too

Mathew McDermott, global head of digital assets at American multinational bank Goldman Sachs Group Inc., told Bloomberg that the company plans to offer Ethereum (ETH) futures trading.

Futures are financial instruments that allow traders to bet on the price movement of an underlying asset without actually owning it, often through "leverage." This helps avoid many of the issues associated with custody and regulation, particularly in the cryptocurrency market.

Goldman Sachs changes

About a year after denouncing cryptocurrencies as a non-asset class, the American multinational investment bank and financial services company is opening up to Bitcoin (BTC) and is now trying to delve deeper into the Ethereum ecosystem.

In May, the company relaunched a trading unit to help its clients trade publicly traded futures tied to Bitcoin. In the coming months, the bank plans to offer options and futures trading on Ethereum, according to Mathew McDermott, head of digital assets at Goldman Sachs.

Matthew McDermott previously served as managing director of the investment bank’s internal treasury business at Goldman Sachs. He replaced Justin Schmidt last year. Justin Schmidt was appointed as the firm’s first head of digital asset markets in April 2018.

“We’re actually seeing a lot of interest from clients who are eager to trade because they’re finding these levels to be a slightly more acceptable entry point,” said Matthew McDermott, who has been actively expanding his cryptocurrency team since being named head of crypto last year.

He added: “We view this as a clean-up operation to reduce some of the leverage and excess in the system, particularly from a retail perspective.”

Ethereum sparks customer interest

Matthew McDermott also recently released a set of data. Goldman Sachs conducted a survey in early March this year. Among its 280 clients interviewed, 40% of the clients already had cryptocurrency-related investment exposure, and 61% of the clients said they would increase their cryptocurrency holdings in the next year.

In a survey of 850 institutions last week, Goldman Sachs found that nearly 10% of institutions were trading cryptocurrencies, which means that one in five institutions is interested in cryptocurrencies.

In May, Goldman Sachs led a $15 million investment in cryptocurrency and blockchain data analytics provider Coin Metrics, with Matthew McDermott joining the company’s board of directors.

“We are looking at a number of other companies that fit our strategic direction,” the head of Goldman Sachs’ cryptocurrency division said of their latest Ethereum futures plans, adding that his communications with clients reveal their ambitions in the cryptocurrency space: “Despite the price correction, we continue to see strong market interest in this space.”

As more and more investors discover lucrative opportunities in the cryptocurrency space, fewer and fewer investors are putting their money into central banks, which is worrying them. Apparently, this in turn is slowly driving the development of cryptocurrencies. As Matthew McDermott said, “Institutional adoption will continue.”

Cryptocurrency is a product of a disruptive era and a global carnival.
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