Wall Street giant Goldman Sachs, a leading global investment bank, has launched its first-ever loan backed by cryptocurrency.
Read CRYPTONEWSLAND onAccording to a report from Bloomberg on Thursday, Bitcoin owned by the borrowers can be used as collateral to avail of the loan.
A spokeswoman for the bank disclosed in the report that the secured lending facility lent cash collateralized by borrowers who owned Bitcoin. Noting that the agreement was interesting to Goldman Sachs because of its structure and 24-hour risk management.
Recently, the investment bank has been increasing its exposure to cryptocurrency. Last March, the firm executed its first over-the-counter (OTC) crypto transaction. A few days later, Goldman Sachs’ homepage featured digitalization, including cryptocurrencies and metaverse. The company visualized the digital world as an $8 trillion opportunity.
Last year, the company made moves to further expose itself to the crypto space. This includes bringing back its “Bitcoin trading desk” as the Crypto Market became more mature, establishing a crypto trading team and launching Bitcoin derivatives trading, and expanding its crypto trading options to add Ethereum (ETH) futures and options.
In January, the wall street giant said that the price of Bitcoin (BTC) could reach $100,000. The bank’s analyst described:
“Bitcoin may have applications beyond simply a ‘store of value’ and digital asset markets are much bigger than bitcoin.”
Goldman Sachs wasn’t the first investment bank to offer Bitcoin-backed loans. In March, Silvergate Bank released a $205 million loan to Nasdaq-listed software company Microstrategy. The loan, collateralized by Microstrategy’s Bitcoin holdings, was used to buy additional Bitcoin for its company’s treasury
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