Back to top

Image: Bigstock

Golman Sachs (GS) and Citigroup (C) Eyeing Bitcoins Space

Read MoreHide Full Article

The Goldman Sachs Group, Inc. (GS - Free Report) and Citigroup Inc (C - Free Report) are plodding deep into the $1.1-trillion worth Bitcoin arena, garnering access to investors who want to place big bets. The news was reported by Bloomberg and Financial Times, for each firm respectively.

Goldman Sachs has launched trading with non-deliverable forwards, i.e. derivatives tied to Bitcoin’s price, which will be cash-settled. Additionally, the company will shield itself from the cryptocurrency’s fluctuations by trading Bitcoin futures in block trades on CME Group Inc. (CME - Free Report) , with Cumberland DRW as its trading partner.

Goldman Sachs, which reopened a trading desk earlier this year to help clients trade in Bitcoin-tied listed futures, had also wagered an interest to offer private clients additional vehicles to bet on cryptocurrency-linked prices. Nonetheless, this strive toward forward contracts dramatically enhances its ability to assist large investors take positions in the asset. The Cumberland partnership further accentuates the bank’s willingness to work with external firms to help in the process.

Banks are still prudent regarding regulatory challenges surrounding the ownership of Bitcoin outright. And since Goldman Sach’s new derivative offering is settled in cash, it does not require dealing with physical Bitcoin.
Furthermore, a number of foreign banks are contemplating taking the first step into cryptocurrency markets after an upsurge in interest or curiosity from their clients. Citigroup is the latest international bank to prod upon the option of providing cryptocurrency-related services after seeing the mammoth interest from its clients on the same.

Citigroup has been witnessing a “very rapid” build-up of interest in bitcoin across a wide spectrum of clients, including large asset managers.
The bank is yet to finalize if or not it will offer clients cryptocurrency-related services, but trading, custody and financing are all under consideration, as stated by the firm’s global head of foreign exchange, Itay Tuchman.

Our Take

Such an effort by both banks will likely boost the world’s most popular cryptocurrency asset’s prospects further, at least on grounds that Goldman Sachs and Citigroup are garnering cryptocurrency access to their clients.

The bitcoin rally has enticed big corporations, FinTech players and institutional clients to hold such digital assets. Investors have also been flocking to the flagship cryptocurrency on the back of acceptance from Elon Musk’s Tesla, Inc. (TSLA - Free Report) , which had disclosed about its $1.5-billion bitcoin purchase, driving the cryptocurrency to record highs, breaching $1 trillion in market capitalization for the first time ever.

Shares of Goldman Sachs have gained 70.3%, in the past six months, compared with Citigroup’s rally of 57%.

Both stocks presently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The Goldman Sachs Group, Inc. (GS) - free report >>

Citigroup Inc. (C) - free report >>

CME Group Inc. (CME) - free report >>

Tesla, Inc. (TSLA) - free report >>