Goldman Sachs Group Inc. logo. Hanging on the floor of the New York Stock Exchange in New York, US, on Wednesday, May 19, 2010.
Daniel Acker | Bloomberg | Getty Images
Goldman Sachs Pushes into the emerging market for derivatives linked to digital assets.
CNBC has learned that the company is about to announce that it is the first major US bank to trade an OTC cryptocurrency transaction. Goldman Sachs traded a bitcoin-linked instrument called a non-deliverable option with a crypto merchant bank Galaxy DigitalAccording to the two companies.
The move is seen as a notable step in the development of crypto markets for institutional investors, in part due to the nature of OTC deals. Compared to stock exchange based CME مجموعة group Bitcoin Products Although Goldman Sachs began trading last year, the bank is taking more risk by serving as the head of the transactions, according to the companies.
Goldman’s involvement, a major player in the global markets for traditional assets, is a signal of the increasing maturity of the asset class for institutional players such as hedge funds, according to Galaxy co-chair Damian Vanderwelt.
“This trade represents the first step that banks have taken to provide direct and customizable exposure to the crypto market on behalf of their customers,” Vanderwilt said in an interview.
Options trading is “more systematically linked to the markets than clearing futures or other exchange-based products,” Vanderwelt said. “At a high level, this is due to the implications for the risks that banks are exposed to; they indicate their confidence in the maturity of cryptocurrencies so far.”
The companies said hedge funds are seeking derivative exposure to bitcoin, either to bet on its price without directly owning it, or to hedge existing exposure to it. The market for these tools is Mostly controlled By original crypto companies including Galaxy, Genesis and GSR Markets.
“We are thrilled to implement the first cash-settled crypto options trading with Galaxy,” Max Minton, Goldman’s Head of Digital Assets in Asia Pacific, said in a statement. “This is an important development for our digital asset capabilities and for the broader evolution of the asset class.”
The bank saw a surge in demand for options tied to digital assets, Global Head of Cryptocurrency Trading at Goldman Andrei Kazantsev He said in December.
“The next big step we envision is the development of options markets,” he said.
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