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Bitcoin rises back above $50,000 as Goldman restarts crypto desk

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2 min read
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Goldman Sachs logo. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images
Goldman Sachs logo. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The price of bitcoin (BTC-USD) has risen back above $50,000 amid reports that Goldman Sachs (GS) is considering restarting its cryptocurrency trading desk.

Reuters reported that Goldman was restarting a desk to handle bitcoin futures and non-deliverable forwards on behalf of clients. A source close to the bank confirmed the details of the report. Goldman Sachs declined to comments.

Bitcoin was trading 5.1% higher at $51,466.96 just after 10am in London on Wednesday. It marked a one week high for the cryptocurrency.

Bitcoin has rallied strongly over the last 24 hours. Photo: Yahoo Finance UK
Bitcoin has rallied strongly over the last 24 hours. Photo: Yahoo Finance UK

Naeem Aslam, chief market analyst at Avatrade, said confirmation of Goldman's re-entry to the market would be "the most significant news since Tesla." Tesla (TSLA) said last month it had invested $1.5bn into bitcoin, sending the cryptocurrency's price surging.

Bitcoin hit an all-time high above $58,000 on 21 February before experiencing a pullback. The cryptocurrency reached a low of around $43,300 on Sunday before beginning to recover.

"We are seeing momentum coming back for Bitcoin," Aslam said. "There is no doubt that sentiment is strong among investors and traders who firmly believe."

Watch: What is bitcoin?

READ MORE: Citi and Ruffer predict breakout moment for bitcoin

The rally came despite comments from Gary Gensler, Joe Biden's pick to lead the US Securities and Exchange Commission. Gensler said that rooting out cryptocurrency fraud would be a priority for his agency during a confirmation hearing on Tuesday. Bitcoin's price dipped briefly following the comments.

"The fact is, there is a strong need to eradicate all the sham projects from the crypto arena," said Aslam. "Bitcoin certainly does not belong to that equation."

Goldman Sachs' move to restart its trading desk is a sign of renewed interest in the cryptocurrency among the professional investment class.

Bitcoin has rallied almost 400% since the start of last October amid a surge of interest from well established companies. Payments company Square (SQ) has invested over $200m in bitcoin and the likes of PayPal (PYPL), Mastercard (MA) and BNY Mellon have all said they will begin to handle the asset on behalf of clients.

Earlier this week, UK asset manager Ruffer (RICA.L) predicted "a long trend of institutional adoption and financialisation of bitcoin." Citi (C) said that bitcoin could be at a "tipping point," although the bank's research note has since faced criticism over its sourcing and accuracy of data.

Watch: What are the risks of investing in cryptocurrency?