Crypto’s Demand Multiply, Goldman Sachs Aches for Some Investing

Major Signals

• With bitcoin rapidly rising in value, more investors are seeking exposure to the cryptocurrency.
• The price of bitcoin increased by 24% this January and over 90% since December 2020.
• Some of Spain’s biggest banks have begun investing in the cryptocurrency market.

One bitcoin exchange-traded product in particular, BTCE, has recorded an average daily trading volume of $69 million in the first 11 days of January, the Financial Times reported Friday, citing data from Deutsche Börse where it is trading.

This week, Switzerland’s principal stock exchange revealed that its crypto trading volume hit a record high of $1.2 billion in 2020. The exchange now lists 34 crypto exchange-traded products.

Grayscale Investments’ Bitcoin Trust posted an average daily turnover of almost $1 billion in the first two weeks of this year, which is more than nine times the average in 2020, the publication added.

The bitcoin trust’s assets under management grew from $1.8 billion to $17.5 billion during the year.

Meanwhile, Canadian asset manager 3iq says its bitcoin fund has reached a milestone, exceeding one billion Canadian dollars ($785 million) in assets under management. Besides the bitcoin fund, the company offers the ether fund and a global crypto-asset fund.

Goldman Sachs’ global head of commodities research, Jeff Currie, said last week that the bitcoin market “is beginning to become more mature” after he called BTC “a retail inflation hedge.”

The investment bank is now rumored to have issued a request for information (RFI) to explore providing digital asset custody service.

The RFI was reportedly sent to a prominent company in the crypto custody niche at the end of last year. An unnamed Goldman Sachs source indicated that the firm is talking to several companies with a focus on custody service.

Recently, the U.S. Office of the Comptroller of the Currency (OCC) granted Anchorage conditional approval to become a national digital bank.

Anchorage co-founder Diogo Mónica told CNBC last week that the regulatory approval will attract many large institutional players to begin offering their own crypto services, including custody.

Other banks and financial services giants that have recently entered the crypto space include Spain’s second-largest bank BBVA, Standard Chartered Bank, Southeast Asia’s largest bank DBS, and Italian insurance giant Generali.

Some of them offer only crypto custody services while others also offer bitcoin trading services.