The driving force behind this is Goldman Sachs’s desire to expand its cryptocurrency offerings to clients. The head of digital assets for Goldman’s Asia-Pacific region, Max Minton, says that “Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade. In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.”
Galaxy Digital was founded by ex-Goldman Sachs partner, Michael Novogratz, in 2018. This company is a digital asset management firm headquartered in New York City. The company strives to create institutional-grade cryptocurrency and blockchain products and services through big companies like Goldman Sachs. Damien Vanderwilt, Galaxy’s Co-President and Head of Global Markets, says that they “are proud to be a strategic partner of Goldman and look forward to working with Max and his team to meet the increasing demand from institutions and pave the way to broader adoption of cryptocurrencies as an asset class.”
While Galaxy Digital’s shares are currently listed on the Toronto Stock Exchange, they will very likely offer shares in the United States in the following years.
Co-President Vanderwilt states that Goldman Sachs is essentially leaning on Galaxy Digital to gain a foothold into the crypto world. He comments on the reason for this being that the extremely regulated banking industry cannot handle Bitcoin directly; Galaxy Digital is being used as a bridge between financial firms and the crypto world.
The Future Relationship Between Banks and the Crypto World
Goldman Sachs tapping Galaxy Digital will not only benefit their companies but the banking and crypto world as a whole. The great efforts by Goldman Sachs may just pave the way for banks on Wall Street as they face increasing pressure from clients that want to be involved in the crypto world, especially Bitcoin. It may even reach the point where if enough banks allow their clients to trade Bitcoin, then Bitcoin would become less volatile, further increasing clients’ desire to use it.
Following its partnership with Galaxy Digital, Goldman Sachs has announced that it plans to expand its crypto offerings for clients with Ether futures — legal agreements to buy or sell Ether at a later date — in the following months. Ether is the world’s second-largest cryptocurrency, so Goldman Sachs is eager to get involved with it.
“Goldman Sachs Starts Trading Bitcoin Futures, Taps Galaxy Digital as Liquidity Provider.” Blockchain News, 21 June 2021, blockchain.news/news/goldman-sachs-starts-trading-bitcoin-futurestaps-galaxy-digital-as-liquidity-provider.