Goldman Sachs’ ‘Bitcoin OTC’ options trading doesn’t make much sense, but could pave the way for more institutional involvement – ​​TechCrunch

Goldman Sachs is no longer a stranger to test the waters with crypto, with institutional clients looking for more exposure in the space.

Last week, Goldman was the first major US bank to make a trading crypto options without a prescription with Galaxy Digital, which some market players say is heralding greater adoption of institutional digital assets.

A source working with digital assets at a major investment bank told TechCrunch: “The crypto market needs large, trustworthy and credit-worthy partners to grow the space further. . “Goldman and other Wall Street banks will eventually deliver on that.”

The 153-year-old company is headquartered in New York City with offices globally and has 2.47 trillion dollars monitored assets. Galaxy Digital’s trading unit facilitated and executed the transaction with the investment bank as a Bitcoin non-distributable option.

This means that the company does not directly participate in or hold the underlying cryptocurrency, but exercises an option with the return paid in cash, Tim Granthead of Europe at Galaxy, explained to TechCrunch.

“The transaction itself doesn’t make much sense, but the fact that it happened and opened the door for Goldman Sachs to trade with this risk is huge, and this is just the beginning,” said Grant. ‘ said Grant. “As soon as you get into that part, that set of barriers, you have the intellectual and operational freedom to do other things. It is not a transaction in itself, but this will allow us to go in many directions. “

Goldman did not provide additional information requested by TechCrunch prior to publication.

The company is no stranger to cryptocurrencies, or more specifically, Bitcoin. It first set up a crypto trading desk in 2018, but closed for three years, only to restart it in early 2021. Since then, the bank has moved further into the crypto world by allowing investors to trade Bitcoin derivatives through block transactions on CME Group in May 2021 and offering customers access to ether funds through Galaxy Digital, among other services.

“I expect [crypto] space to be more institutionalized in the coming months [and] every investment banker will be entering the field in the next year or so,” said Kevin Kang, a founding principal at BKCoin Capital, speak. “Cryptocurrencies will become part of any bank’s service and trade like another asset class.”

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