Goldman Sachs, one of the world's largest banks, has purchased its first Bitcoin non-deliverable option on the OTC market from digital asset firm Galaxy Digital.
Goldman Sachs is the first major bank to enter the OTC cryptocurrency market. The US bank has purchased a non-deliverable Bitcoin OTC option (NDO) from Galaxy Digital, a company dedicated to investment management and financial services based on digital assets.
In a release Recently, the company reported that Goldman Sachs has taken another important step to continue expanding its offering of cryptocurrencies, to Wall Street investors, demonstrating the institutional interest that exists in crypto assets and the maturity that the market has gained since its birth 13 years ago.
Damien Vanderwilt, co-president and head of global markets at Galaxy Digital, said that the transaction reinforces the partnership that exists between the bank and the company. Goldman Sachs has been deepening its capabilities in the crypto industry through Galaxy Digital. In 2021, the company facilitated Goldman Sachs with its first Bitcoin futures transaction on the world's largest derivatives exchange, CME Group. Likewise, in the middle of this month, Goldman Sachs began offering exposure a Ethereum (ETH) to its clients through the investment fund “Galaxy Digital's Ethereum Fund”.
Vanderwilt hopes that the partnership with Goldman Sachs and its first successful trade in the Bitcoin OTC market will open the doors for other major banks to consider the over-the-counter market as an effective avenue for trading cryptocurrencies and digital assets.
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Goldman Sachs and its growing interest in Bitcoin
In April 2021, Goldman Sachs reopened a cryptocurrency trading desk with Bitcoin (BTC) in front. The bank had started trading Bitcoin-based futures since 2018. However, it closed its operations when the price of BTC fell after the boom seen at the end of 2017 and it was not until last year, when the price of BTC was around 50.000 dollars per unit, that Goldman Sachs decided to reopen the negotiation of futures contracts with this cryptocurrency.
Reuters, which reported The news for the first time highlighted at that time that institutional interest in Bitcoin and cryptocurrencies had skyrocketed more than 400%, motivated by the accelerated growth of crypto assets in the market. More and more companies are getting involved in the industry. blockchain and cryptocurrencies through established financial institutions, such as CME Group and Fidelity, that offer financial products and services related to crypto assets, the media indicated.
Greater confidence in cryptocurrencies
One of the biggest concerns of institutional investors regarding the cryptocurrency industry has been the regulatory environment. However, the entry of important banks such as Goldman Sachs, recognized globally, demonstrates confidence in the maturity that this industry has obtained in recent years, Vanderwilt said. In an interview on CNBC, the director of global markets at Galaxy Digital noted that the US bank is assuming all the implications of the risk of operating with cryptoassets to “deliver direct and customizable exposures to the crypto market on behalf of its clients.”
Goldman Sachs' head of digital assets for the Asia Pacific region, Max Minton, said that executing its first Bitcoin options trade is an important development in its digital asset capabilities, marking the beginning of a broader vision towards Cryptocurrencies as a new asset class.
Andrei Kazantsev, global head of crypto trading at Goldman Sachs, had said in December that the bank was considering the development of cryptocurrency options markets, to accelerate institutional adoption of cryptoassets amid increased investor demand.
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