Blockchain and Crypto

Goldman Sachs has hired a crypto trader

  • Goldman Sachs has hired Justin Schmidt as vp and head of digital asset markets to help the bank through its crypto exploration
  • Goldman maintains that contrary to months-long rumors it has no plans to launch a crypto trading desk
close

Email a Friend

Goldman Sachs has hired a crypto trader

Goldman Sachs has hired a crypto trader to help it navigate client interest in trading bitcoin and other crypto assets.

Justin Schmidt joined the investment banking giant’s securities division last week as vp and head of digital asset markets. He was previously a senior vp at Seven Eight Capital and portfolio manager at LMR Partners before that, according to his LinkedIn profile.

Rumors about Goldman’s strategy for crypto-related offerings have circulated since December after Bloomberg reported the bank is planning the launch of a crypto trading desk. Dedicated crypto media outlets have tried to debunk that story, reporting the bank already has one. Goldman Sachs has continually denied these stories. (In 2015, however, Goldman was part of a $50 million funding round in Circle, which at the time was designed to let users trade bitcoin and has since pivoted to a payments company and launched a second product dedicated to trading).

“In response to client interest in various digital products, we are exploring how best to serve them in the space,” Tiffany Galvin, a spokeswoman, said in a statement Friday. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”

Still, it’s telling that Goldman, the bank with a reputation for being one step ahead of its peers, is putting money and resources behind someone dedicated to helping it explore “the range of options” it has to help clients play with crypto if they want to.

“The job of a bank’s trading desks is to help their clients trade the financial stuff that they want to trade,” Matt Levine wrote last week. “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.”

Goldman’s current involvement in crypto assets is as a facilitator rather than a market maker. It offers clients exposure to bitcoin through the bitcoin futures contracts offered on the Cboe Global Markets and CME Group exchanges. It acts in an agent-only capacity, serving as a middleman to allow clients to get access to crypto on the exchanges by placing an order with Goldman Sachs, a member of the exchanges. It is not active on any cryptocurrency exchanges, Galvin confirmed.

Goldman was one of the earlier members of these exchanges to agree to do that, but its offering as it relates to bitcoin remains limited, she added.

There’s also a high level of regulatory interest in crypto assets. It’s still not entirely clear how to regulate bitcoin or other crypto assets, but for the time being the Securities and Exchange Commission — which tends to not give guidance on whether something is a security or not, so as not to discourage innovation — generally views and treats cryptocurrencies the same way it does securities. Last month, it said it’s looking to apply securities laws to cryptocurrency exchanges and wallets.

Barclays in the U.K. said last week that it’s similarly monitoring developments in the cryptocurrency space and gauging clients’ interest in the bank launching a crypto trading desk, but that it has no concrete plans to do so.

It’s likely more and more banks will begin touting the ability to give clients access to crypto trading, without having to sell contracts themselves — at least until client expectation of this type of trading reaches a critical mass or the industry gets more clarity from regulators.

0 comments on “Goldman Sachs has hired a crypto trader”

Blockchain and Crypto

With Earn, Gemini users can buy, sell, save, and earn interest from crypto on one platform

  • Crypto exchange Gemini unveiled its interest-earning program today.
  • Gemini Earn allows users to buy, store, spend and earn interest under one platform.
Rimal Farrukh | February 02, 2021
Blockchain and Crypto, Member Exclusive

Gemini launches crypto credit card with bitcoin awards

  • Gemini prepares to roll out its Gemini Credit Card which offers users a cryptocurrency rewards program.
  • The credit card will be launched in connection with Gemini’s recent acquisition of Blockrize.
Rimal Farrukh | January 15, 2021
Blockchain and Crypto, Member Exclusive

Anchorage Digital Bank is the first federally chartered digital asset bank

  • Anchorage Digital Bank received the OCC's first charter for a crypto bank.
  • The license will enable Anchorage to act as a custodian for other traditional banks that want to offer crypto.
Zoe Murphy | January 14, 2021
Blockchain and Crypto, Member Exclusive

With new products by PayPal and Revolut, cryptocurrency is making its way into mainstream

  • Square’s Cash App, Revolut, and PayPal are facilitating cryptocurrency use.
  • Banks remain skeptical about security concerns
Rivka Abramson | November 05, 2020
Blockchain and Crypto, Member Exclusive

Building the primary financial account of the cryptoeconomy, Coinbase launches a debit card

  • For crypto to become more mainstream, the set of technologies needs to become easier to use.
  • Coinbase is launching a debit card that lets users spend crypto just by swiping.
Michael Deleon | October 28, 2020
More Articles