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Goldman Sachs Is The First Major US Bank To Announce OTC Crypto Trading

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Goldman Sachs, the investment banking giant, has become the first major US bank to offer cryptocurrency over-the-counter (OTC) trading. According to CNBC, this move pushes it farther into the embryonic market for derivatives connected to digital assets.

Goldman Sachs apparently sold a bitcoin-linked product known as a non-deliverable option with crypto merchant bank Galaxy Digital yesterday.

Yesterday, Goldman Sachs reportedly sold a bitcoin-linked derivative known as a non-deliverable option to crypto merchant bank Galaxy Digital.

Goldman’s involvement, according to Galaxy co-President Damien Vanderwilt, is proof of the asset class’s maturity for institutional participants such as hedge funds. According to him, Goldman Sachs is a major player in traditional asset markets around the world.

“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 reportedly said in an interview.

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The options trades are “much more systematically relevant to markets compared to cleared futures or other exchange-based products. At a high level, that’s because of the implications of the risk banks are taking on; they’re implying their trust in crypto’s maturity to date”, he continued.

Hedge funds have sought derivative exposure to bitcoin, either to speculate on its price without directly owning it or to hedge current exposure to it, according to the firms. The market for these instruments is dominated mostly by crypto-native enterprises like Galaxy, Genesis, and GSR Markets.

Goldman’s Asia Pacific head of digital assets, Max Minton, said in a statement. “We are pleased to have executed our first cash-settled cryptocurrency options trade with Galaxy. This is an important development in our digital assets capabilities and for the broader evolution of the asset class.”

Goldman Sachs’ global head of crypto trading Andrei Kazantsev indicated in December 2021 that there has been a lot of interest in digital asset options.

“The next big step that we are envisioning is the development of options markets,” he stated.