Goldman Sachs expands crypto desk with Ether options, futures despite recent correction

• Goldman Sachs is looking to expand its crypto offerings beyond Bitcoin as institutional adoption continues.
• The investment bank intends to offer options and futures on Ether in the coming months.
• The head of digital assets at the firm stated that clients are banking on current price levels following the recent downswing. 

Investment banking giant Goldman Sachs plans to offer options and futures trading in Ethereum in the coming months, just months after reopening its crypto trading operations.

Institutional demand rises as firms look to buy the dip

While institutional demand for cryptocurrency has been surging in the past few months with the rise of digital asset prices, Goldman Sachs decided to reactivate its crypto trading desk. 

According to Matt McDermott, the bank’s head of digital assets said that a recent survey found around 61% of the firm’s clients plan to increase their holdings in the new asset class over the next year.

McDermott added that the bank plans to offer options and futures trading in Ether in the coming months, moving beyond Bitcoin. 

Just a month ago, the investment bank started to offer investors access to non-deliverable forwards, a derivative product tied to Bitcoin price and pays out in cash. He said the firm is also planning to facilitate trades via exchange-traded notes tracking Ether. 

Despite the recent crypto market crash and warnings from regulators due to Bitcoin’s heightened volatility, hedge funds’ enthusiasm to trade digital assets has not faded. McDermott said:

“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. We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”

He highlighted that other large banks have also expanded their crypto operations, including Cowen and Standard Chartered. 

The head of digital assets highlighted through conversations with clients that show cryptocurrencies are not just a passing trend and are likely here to stay. 

Through a survey of 850 institutions last week, the investment bank found that around 10% of clients are trading digital assets, and 20% are interested in it. McDermott added:

“Institutional adoption will continue. Despite the material price correction, we continue to see a significant amount of interest in this space.”

In fact, due to the recent market crash, McDermott said a lot of clients find these price levels as a “slightly more palatable entry point.” He concluded:

“We see it as a cleansing exercise to reduce some of the leverage and the excess in the system, especially from a retail perspective.”