Goldman Sachs has surprised many by hiring a renowned crypto trader, Justin Schmidt. Intended to help the bank successfully venture into trading bitcoin and other cryptocurrencies, the new VP and head of digital marketing assets marks an appointment unlike any other for the financial giant.
Formerly a senior VP at Seven Eight Capital, and a portfolio manager at LMR partners, Mr Schmidt has joined the investment bank’s securities division.
His appointment helps to clarify the many rumours surrounding Goldman Sachs’ crypto strategy, which have previously implied the likely launch of a crypto trading desk. Though many respected media outlets have tried to debunk this theory, and the bank itself has loudly denied it, it has continued to circulate nonetheless.
Now, it seems that those who began this speculation may have been right all along, with spokeswoman Tiffany Galvin commenting in a statement on Friday:
“In response to client interest in various digital products, we are exploring how best to serve them in the space.”
With Goldman Sachs long lauded as a bank that’s typically one step ahead of the competition, it’s telling that they are now investing both money and resources into an individual with such extensive experience of the cryptocurrency sector.
As expert Matt Levine notes:
“The job of a bank’s trading desks is to help their clients trade the financial stuff that they want to trade. 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.”
If Goldman Sachs is of the same opinion, then their expansion into the role of market maker as opposed to a simple facilitator of crypto assets must be seen as almost inevitable. Rather than acting in an agent-only capacity, they must surely stop functioning as mere middlemen and take their natural place at the head of developments instead.
Goldman Sachs are not the only banking behemoth who seem set to take such a plunge in the near future. Barclays have also made their opinions on the matter heard in recent weeks, noting that they are both monitoring developments in the crypto space and exploring their clients’ interest in the sector.
With more and more banks set to give their clients access to virtual currency trading, client interest growing apace, and a real push to gain greater clarity from regulators, it seems that many big financial entities will soon feel the need to follow in their footsteps.