One of America’s largest investment banks, Goldman Sachs, reportedly made its first Bitcoin-backed loan recently, marking yet another milestone in the increasingly rapid embracement of the digital asset by top Wall Street firms.
According to a report from Bloomberg, the bank extended a cash loan that was collateralized by BTC, meaning that the bank can seize the digital asset in case the borrower fails to pay back the facility on time.
A spokesman for the firm stated that the deal was particularly “interesting” due to its structure and the possibility of tracking the value of the collateral 24 hours a day throughout the entire year.
More and more financial powerhouses have been starting to offer crypto-backed products and services as consumers continue to get increasingly familiar with the benefits of this ecosystem.
Companies such as Mastercard and Visa have launched debit and credit cards backed by crypto assets in partnership with top exchanges such as Coinbase, Binance, and Kraken.
Meanwhile, financial services providers have rushed to create investment vehicles such as exchange-traded funds (ETF) and derivatives for those who would like to incorporate digital assets into their portfolios or speculate with them.
Just yesterday, Blackrock – one of America’s largest asset management firms – launched its first blockchain-focused ETF. According to the firm, blockchain technology is one of the top three megatrends that could potentially disrupt the world economy as we know it.
For Goldman, cryptocurrency operations are becoming more and more frequent as well. Last month, the investment bank completed its first over-the-counter (OTC) operation with BTC options in collaboration with Galaxy Digital.
The completion of this transaction marked yet another step in Goldman’s slow but apparently decisive move to start offering cryptocurrencies to its large customer base after the bank reportedly started to build a cryptocurrency trading desk in May 2021.
Moreover, the company reportedly explored a collaboration with crypto derivatives exchange FTX in a closed-door meeting between the top execs of the two financial firms.
Top Goldman Sachs Executives Change Their Opinion About BTC
A few years ago, Bitcoin was deemed by top Wall Street executives as either a fraud or a fad.
The former Chief Executive of Goldman Sachs back in 2017, Lloyd Blankfein, was among those who had a negative view about cryptos as it was his opinion that Bitcoin was “a vehicle to perpetrate fraud” amid its elevated volatility.
Later on, the head of the investment bank softened his view and stated that it was “arrogant” to dismiss Bitcoin – and crypto for that matter – entirely.
Much has changed since then and it was Blankfein who interestingly led the way in this change of tone toward the prospects of blockchain technology and crypto. Even though he is no longer at the helm of Goldman, his views about the financial world continue to resonate among his colleagues.
In January this year, the former top executive of the investment bank stated that his opinion about cryptos was “evolving” while he acknowledged that even though he may not feel entirely comfortable with them, they are “happening” – possibly referring to the world’s increasingly fast pivot toward decentralization.
Meanwhile, the current Chief Executive of Goldman – David Solomon – has adopted a positive view altogether about the ecosystem but not necessarily about Bitcoin.
In this regard, the seasoned executive stated that he does not think of Bitcoin (BTC) as “the key thing”. Instead, he believes that the underlying technology that powers the BTC network – the blockchain – is more important than the digital asset alone.
In any case, Goldman’s actions are speaking louder than the words of its executives as the bank continues to move forward to become a major player in the landscape by offering crypto-related services and possibly by engaging in more sophisticated activities such as market-making.
Crypto assets are highly volatile unregulated assets. Your capital is at risk.