Goldman Sachs, a global investment bank, has reported that it offered its first ever loan secured by cryptocurrency. This cash loan was secured by Bitcoin owned by the borrower. Goldman Sachs spokesmen explained that due to its structure (and 24-hour risk management), the deal is attractive for the bank.
Goldman Sachs and Bitcoin – Backed Loans
Bloomberg reported that Goldman Sachs, the global investment bank has made its first bitcoin-backed cash loan.
According to a bank spokeswoman, the secured lending facility was used for cash collateralized by Bitcoin owned by the borrower. Goldman Sachs found the deal interesting due to its structure and 24 hour risk management.
Goldman Sachs is becoming more open to crypto currency. The investment bank’s March homepage featured digitalization, the metaverse and cryptocurrency. According to the firm, $8 trillion is a potential opportunity in the metaverse.
In March 2013, the global investment bank announced that it had reopened its bitcoin trading desk. It officially established a team for cryptocurrency trading and began trading bitcoin derivatives in May. Goldman Sachs had expanded its cryptocurrency trading desk in June to include futures and options for ether (ETH). The bank completed its first OTC cryptocurrency transaction in March of this year.
Goldman Sachs stated in January that bitcoin’s price could rise to $100K. “Bitcoin may have applications beyond simply a ‘store of value,’” the bank’s analyst explained, adding that “digital asset markets are much bigger than bitcoin.”
These loans, which are backed by bitcoins, have become more and more common. The Nasdaq-listed software company Microstrategy recently obtained a $205 million loan from Silvergate Bank backed by the company’s bitcoin holdings. Microstrategy used this loan to acquire additional bitcoin for corporate treasury.
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