Goldman Sachs has begun trading bitcoin futures with cryptocurrency merchant bank Galaxy Digital.
New York-based Galaxy Digital, founded by Mike Novogratz, works with over 300 institutional trading counterparties.
"The addition of Galaxy as a liquidity provider follows Goldman Sachs' successful execution of its first cryptocurrency trades and formalised set-up of its bitcoin desk last week, two months after the US bank announced that it would re-enter the cryptocurrency market amidst growing demand from institutional clients," Galaxy Digital said in a statement.
As cryptocurrencies, particularly bitcoin, gain popularity among institutional investors, investment banks have been working towards catering to the demands of their clients.
Galaxy co-president Damien Vanderwilt told CNBC that this is the first time that Goldman Sachs used a digital assets firm as a counterparty after setting up a cryptocurrency desk in May.
"There's a whole dynamic with the major banks that I've seen time and time again: safety in numbers," Vanderwilt told the news channel.
"Once one bank is out there doing this, the other banks will have (fear of missing out) and they'll get on-boarded because their clients have been asking for it."
Also read: Rapper Raftaar is the first Indian artiste to accept cryptocurrency as performance fees
Goldman Sachs has tied up with Galaxy because the highly regulated banking industry cannot handle bitcoin directly, he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
