Goldman Sachs has announced a major over-the-counter cryptocurrency transaction. With this move, it moves into an embryonic market for derivatives related to digital assets.
Goldman Sachs has announced a major over-the-counter cryptocurrency transaction
Goldman Sachs and crypto merchant bank Galaxy Digital exchanged a bitcoin-linked option known as a non-deliverable option. “This trade represents the first step that banks have taken to offer direct, customizable exposures to the crypto market on behalf of their clients,” Vanderwilt said in an interview.
Galaxy co-President Damien Vanderwilt believes Goldman Sachs’ involvement reveals the asset class has matured for institutional players like hedge funds.
Compared to cleared futures or other exchange-based products, options trading is “far more systemically relevant to markets,” according to Vanderwilt.
“At a high level, that’s due to the ramifications of the risk banks are taking; they’re expressing their faith in crypto’s maturity to date.”
Hedge funds have been looking for derivative exposure to bitcoin, either to make price bets without directly owning it or to hedge current exposure to it, according to the firms. Crypto-native firms such as Galaxy, Genesis, and GSR Markets dominate the market for these securities.
Goldman’s Asia Pacific head of digital assets, Max Minton, said in a statement, “We are delighted to have conducted our first cash-settled cryptocurrency options exchange with Galaxy. This represents a significant advancement in our digital asset capabilities as well as the overall progress of the asset class.”
Hedge funds have been looking for derivative exposure to bitcoin, either to make price bets without directly owning it or to hedge current exposure to it, according to the firms. Crypto-native enterprises such as Galaxy, Genesis, and GSR Markets dominate the market for these securities.
“We are happy to have conducted our first cash-settled cryptocurrency options exchange with Galaxy,” said Max Minton, Goldman’s Asia Pacific head of digital assets. This is a significant advancement in our digital asset capabilities as well as the asset class’s overall progress.”
Goldman’s global head of crypto trading, Andrei Kazantsev, said in December that the bank has observed strong demand for digital asset options. He said, “We envision options markets as the next big step.”
Andrei Kazantsev, Goldman Sachs’ global head of crypto trading, stated in December 2021 that there has been a lot of interest in digital asset options.
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Also read: The World’s Largest Hedge Fund Is Investing in Cryptocurrencies
