Goldman Sachs offered first Bitcoin-backed loan
In a big step forward for institutional bitcoin acceptance on Wall Street, Goldman Sachs has given its first Bitcoin-backed loan. For the first time in Goldman Sachs' history, a spokesperson informed Bloomberg that the international investment bank has given cash collateralized by Bitcoin (BTC) owned by the borrower. She went on to say that the offer was particularly appealing due to its structure and round-the-clock risk management.
A Bitcoin owner can use this type of loan to borrow fiat cash, such as the US dollar, by pledging their BTC as collateral to the bank. The underlying volatility of Bitcoin can make these loans hazardous; if the price of bitcoin falls too low, the borrower may be compelled to raise their security, or they may be liquidated. But Goldman Sachs are not alone in this.
BlackRock, a multibillion-dollar asset management business, announced the creation of a blockchain-focused exchange-traded fund (ETF). The company also announced a $400 million investment round and a collaboration with Circle, the main operator of the USDC stablecoin, earlier this month.
Movement of Bitcoin in the last 5 years. (Source: Trading Economics)
Sources:
https://tradingeconomics.com/btcusd:cur
https://thecoin.news/articles/goldman-sachs-offers-first-bitcoin-backed-loan-1651213567816
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