Goldman Sachs Submitting To Client Pressure for Introducing Cryptocurrency Exposure

Goldman Sachs is the largest investment bank in the world. Its current assets under management are valued at $2.145 trillion. The bank works with major institutional clients and facilitates them with investment management, risk management, securities, asset management, prime brokerage, and stock underwriting. 

Last year, the CEO of the financial giant David Soloman expressed his personal opinions about Bitcoin. He was being interviewed by Bloomberg at the time and introducing the new cash management system in EU countries, including the United Kingdom. It should be noted that the bank has been struggling to gain reasonable exposure in the European markets. 

What Prompted Goldman Sachs to Change its Stance on Bitcoin?

According to financial analysts and cryptocurrency experts, a lot of traditional financial institutions have struggled to encourage their clients to have stakes in Bitcoin and other cryptocurrencies. Thus far, any type of centralized or federal regulations has not come to pass to make it less volatile and reduce depreciation risks.

In truth, Bitcoin is quite a volatile asset that took a deep dive of 35% in one day last year. However, its value also keeps gaining several thousand folds in YTD. The most dominant factor in helping the transformation and transition of old-school financial institutions is the pressure from the clients to provide them with crypto exposure. The Institutions like Goldman Sachs and VISA have to get on the program to ensure maximum client retention. 

How Banks have started to Make Room for Bitcoin on their Balance Sheets

Last year, Soloman painted Bitcoin as an unstable and volatile cryptocurrency, among other things, in his interview with Bloomberg. He believed that Bitcoin only depends on other investors to have a higher bet to get a price spike. He further added that BTC was a hedge for uncertainty and not inflation, and it only works as cash savings rather than serving as a cash flow investment.

However, in the ongoing year, Soloman has retrieved his earlier opinion by stating that cryptocurrencies are gaining popularity much earlier than anticipated by the bank authorities. The bank has started to allow its clients to allocate 2-4% or 1-2% into BTC. Soloman now believes that the appreciation rate for Bitcoin can be expected to keep rising. 

 

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