HomeCryptoBitcoinFirst company to receive a secured loan in Bitcoin

First company to receive a secured loan in Bitcoin

Investment bank Goldman Sachs has revealed the name of the first company in history to be granted a secured loan in Bitcoin.

The first collateralized loan in Bitcoin

collateralization bitcoin
Goldman Sachs makes a secured Bitcoin loan to Coinbase for the first time

On 3 May, the American investment bank Goldman Sachs announced the name of the company to which it has granted a loan with Bitcoin as collateral for the first time in history. It is the famous exchange founded by Brian Armstrong, Coinbase.

There has been much discussion for weeks about the renewed interest of investment banks in cryptocurrency-related products, and specifically in exploring the possibility of providing loans secured by cryptocurrencies.

A spokesperson for the investment bank commented on the news stating:

“The deal was interesting to Goldman because of its structure and 24-hour risk management”.

Meanwhile Bloomberg reporting the news described the loan as:

“A significant step for a major U.S. bank that accelerates Wall Street’s embrace of cryptocurrencies.”

According to Coindesk newspaper, at least 10 US investment banks are interested in evaluating products that are linked in some way to cryptocurrencies.

Crypto-related financial instruments grow

In late March, the bank negotiated a non-deliverable Bitcoin (BTC) option – a derivative linked to the BTC price that pays cash – with cryptocurrency investment bank Galaxy Digital. In early April, the firm expanded its OTC crypto options trading to include Ethereum (ETH)-based options contracts as well.

Meanwhile, investment bank analysts in January of this year predicted Bitcoin’s chances of surpassing $100,000, due to the fact that the most important digital currency will probably continue to take market share away from gold as a store of value.

Brett Tejpaul, head of Coinbase Institutional, told financial newspaper Bloomberg that:

“Coinbase’s work with Goldman is a first step in the recognition of crypto as collateral which deepens the bridge between the fiat and crypto economies.”

The financial value of the loan has not been disclosed but according to rumours it appears to have been secured by a portion of Coinbase’s total holdings of 4,487 BTC, worth around $170 million.

The investment company Arca commented on this news in a rather ambiguous way stating that:

“These types of bilateral agreements are rarely done in a vacuum. It is far more likely that Goldman is seeing a lot of demand for this type of transaction and is just testing the waters before making a bigger splash.”

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.