Goldman Sachs has hired a new head of digital assets as the investment bank considers how to answer burgeoning client demand for cryptocurrencies such as bitcoin.
Justin Schmidt will be vice president and head of digital asset markets based at the Wall Street giant, the bank confirmed today. He was formerly senior vice president at Seven Eight Capital in New York, and a portfolio manager in London for multi-strategy investor LMR Partners, according to a social media profile.
Schmidt will join the bank's securities division in New York, but he will not be trading bitcoin or other cryptocurrencies, although the bank remains open to the possibility in the future.
A spokesperson for Goldman said: “In response to client interest in various digital products, we are exploring how best to serve them in the space.
"At this point, we have not reached a conclusion on the scope of our digital asset offering.”
Goldman already offers clients access to the bitcoin futures offered by exchanges firms CME Group and CBOE as part of its prime broker services to clients who wish to gain exposure to the assets.
Bitcoin and other cryptocurrencies have gained limited traction among professional investors in the past year as a frenzy in the second half of last year saw the price of a single bitcoin rise from less than $2,000 to stop just shy of $20,000 on 17 December – the day before the bitcoin futures went live. It was trading at around $8,900 at the time of writing.
Goldman Sachs chief executive Lloyd Blankfein has previously said he would consider trading cryptocurrencies, although added that the extreme volatility they exhibit is still a barrier.
In December Bloomberg reported the bank is setting up a trading desk which would make markets in bitcoin and other digital assets by the end of June. However, Goldman says it has not yet done so.
The appointment was first reported by industry newsletter Tearsheet.