Goldman Sachs Offers Bitcoin-Backed Loans in Cryptocurrency Drive

According to a report published by Bloomberg on Thursday, Goldman Sachs, which manages around $2.5 trillion in assets, has launched a Bitcoin-backed loan. It’s the latest indicator that the new asset class is gaining traction on Wall Street.

For the first time in Goldman Sachs’ history, a spokeswoman told Bloomberg that the multinational investment bank had lent cash collateralized by Bitcoin owned by the borrower. She went on to say that the offer was particularly appealing due to its structure and 24-hour risk management.

Several news sites reported in December on Goldman’s plans to offer Bitcoin-backed loans. Goldman Sachs was one of the first large U.S. banks to enter the crypto market, opening a digital currency trading desk in 2018. Because of high demand, the financial behemoth decided to revive it last March.

Goldman Sachs completed its first over-the-counter bitcoin transaction with Mike Novogratz’s cryptocurrency bank Galaxy Digital earlier this month.

According to Mary Rich, Goldman Sachs’ global head of digital assets for private wealth management, the bank decides to follow Morgan Stanley and offer crypto investments to its private equity clients.

The mainstream banks are following in the footsteps of more specialist organizations like Jefferies Financial Group, which is increasing banking services for cryptocurrency customers. BlackRock recently made a significant investment in stablecoin issuer Circle, investing $400 million in a fundraising round.

Accepting crypto assets as collateral, according to Damien Vanderwilt, co-president of Galaxy Digital Holdings, is the next step beyond services like wealth management, trading, and investment banking for Wall Street banks. Silvergate Capital, a crypto-focused bank, already offers crypto collateral loans.

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