Traditional Investors May Get Drawn to Crypto with Goldman Sachs Custody Services
One of the reasons why most traditional investors have not yet embraced cryptocurrencies is the absence of a mainstream financial institution in the market with which they have already worked, and can thus put their trust in. Goldman Sachs' plans to venture into the cryptocurrency industry by offering custody services for cryptocurrencies might just remove this impediment.
Goldman Sachs is still deliberating launching a cryptocurrency custody service for traditional investors, thus encouraging them to interact with this new asset class. The bank will then hold crypto assets on the behalf of institutional investors and hedge funds, and enable them to engage in crypto investments in a smooth and secure manner.
The company has not yet revealed anything definitive about its plans.
"In response to client interest in various digital products we are exploring how best to serve them in this space," a representative of Goldman Sachs revealed.
Coinbase exploring new crypto assets
Crypto-focused players in the market have already been offering custodial services to investors. Coinbase, the California-based digital currency exchange and vault which is present in 31 countries , and Gemini, a cryptocurrency exchange and custodian founded by Cameron and Tyler Winklevoss, do offer cryptocurrency custody services to institutional investors and crypto hedge funds, however, they have not yet been able to entice traditional investors.
However, institutional investors with an interest in crypto are looking beyond Bitcoin and Ethereum, and exploring other crypto assets. Owing to this growing interest in cryptocurrencies other than the top 2, Coinbase is planning on offering storage for new crypto assets, as stated in its blog. The company has confirmed the launch of support for ERC20 tokens in the coming months, however, it is still deliberating on offering a range of other crypto assets which include Ripple, Wanchain, Telegram, EOS, XLM and Tezos.
"At this point we have not reached a conclusion on the scope of our digital asset offering."The investment bank's plan, if implemented, could also pave the way for other ventures such as prime-brokerages.
Bakkt Exchange to hit the markets in November
Bakkt, a startup by Intercontinental Exchange (ICE) backed by companies like Starbucks, Microsoft and BCG is set to launch a digital assets platform in November. The company is solving a major problem of the cryptocurrency industry, which is transparent and efficient price discovery. On the whole, the startup is pushing the development of a market where money managers will be able to offer Bitcoin ETFs and mutual funds as regulated, mainstream investments. Thus, Bakkt's initiative is likely to be a giant leap towards readying the market for investments from the world's biggest financial institutions.