Goldman Sachs Becomes Latest Investment Bank to Explore Crypto Custody Service

Avi Rosten

Goldman Sachs are reportedly planning to offer a custody service for crypto funds.

According to a report in Bloomberg, the leading Investment Bank is considering a plan that would see them holding crypto-securities on behalf of funds – with the goal of reducing client-risk in holding the investments and protecting funds from attacks.

Although the sources behind the news (who remain unidentified) emphasised that there has been no timeline put in place for the new services, they did suggest that a new custody set-up could precede other services such as prime brokerage.

A spokesperson for Goldman Sachs addressed the rumours:

In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.

Bullish?

With many inside the cryptocurrency industry looking for increasing signs of institutional investment, the news will come as welcome relief. 

If confirmed, these plans would be a significant endorsement of cryptocurrency markets as other Wall Street heavyweights such as JP Morgan Chase and Bank of New York Mellon also explore crypto-custody options.

With the recent announcement by ICE (Intercontinental Exchange) the New York Stock Exchange’s (NYSE) parent company, of a new Microsoft-backed digital assets platform, CoinShares Chief Strategy Officer, Meltem Demirors, however,  took a more cynical approach to the news:

Amun Launches Inverse Bitcoin ETP Allowing Traders to Short BTC

Francisco Memoria

Switzerland-based fintech firm Amun AG has launched an inverse bitcoin exchange-traded product (ETP) that allows traders to short the flagship cryptocurrency and “capitalize on negative price movements.”

According to Amun’s announcement, the new ETP is called the “21 Shares Short Bitcoin ETP (SBTC)” and is listed on the Swiss stock exchange SIX. The inverse ETP tracks bitcoin’s price movements inversely, which means that if BTC’s price climbs traders lose, but win if it falls.

Speaking to TheBlock, Amun’s CEO Hany Rashwan said that the ETP doesn’t need borrowed capital, compared to shorting the cryptocurrency via derivatives. The ETP is reportedly reset at the end of each day and performance isn’t rolled over to the next one, which means it’s “ideally suited to capture short term price movements of bitcoin for a short recommended period.”

Rashwan pointed out the SBTC is the “world’s first” inverse cryptocurrency ETP, and added that there are more products to come:

We are starting with a simple inverse product, but more product types and strategies are coming.

Amun currently manages a total of $55 million in client assets, and has a total of 11 cryptocurrency ETPs listed on stock exchanges. Among them there are ETPs letting investors gain exposure to major cryptocurrency like bitcoin, ether, XRP, and Binance’s BNB token.

For the SBTC ETP, Amun charges a management fee of 2.5% a year. As CryptoGlobe reported, late last year the Switzerland-based firm got regulatory approval to offer its cryptocurrency ETPs in the European Union.

Exchange-traded products are a type of  securities that track the price of an underlying asset, index, or another financial instrument. Amun’s cryptocurrency ETPs let investors gain exposure to various top cryptos without having to custody them and manage private keys.

Featured image via Pixabay.