Multinational investment bank and financial services company Goldman Sachs has made its first hire for its newly-developed cryptocurrency markets unit. Justin Schmidt, a former trader, has been serving as the business’ first head of digital asset markets in the securities division since April 16th.
A graduate of the Massachusetts Institute of Technology, Schmidt previously worked as the vice-president at the quantitative trading firm Seven Eight Capital, and was a quant trader at a proprietary firm among other positions, according his LinkedIn page. Goldman Sachs, however, is still unsure regarding everything it plans to do with its new cryptocurrency department.
“In response to client interest in various digital products, we are exploring how best to serve them in the space, but at this point, we have not reached a conclusion on the scope of our digital asset offering,” explained spokeswoman Tiffany Galvin-Cohen.
Rumors have been swelling about Goldman’s alleged crypto program since last December after it was reported that the bank was launching a crypto trading desk. This story has since been denied and debunked, but the company is in the process of testing its options and seeing where it can make a difference.
‘The job of a bank’s trading desks is to help clients trade the financial stuff that they want to trade,” explained Matt Levine, the enterprise’s managing director and the global head of Technology Risk Advisory. “If the sorts of customers who are banks’ customers want to trade a thing, then that thing becomes a financial thing, and so the banks had better start helping them trade it.”
Levine hinted that the financial institutions working to block crypto purchases through regulated exchanges (i.e. Citibank, Bank of America, etc.) are simply wasting their time and not doing their job by getting in the way of customers’ needs, as they would ultimately find a way to get in on the action regardless.
When it comes to cryptocurrency, Goldman appears to be working as a “facilitator” rather than a market maker at the present. Right now, the company is offering clients exposure to bitcoin through its bitcoin futures contracts on the Cboe Global Markets and CME Group exchanges. It’s merely serving in a “middleman capacity,” ensuring that anyone who places an order can get their hands on crypto. The company is not currently active on any digital currency exchanges, though this could potentially change in the future as its division grows.
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