Cryptocurrencies have become one of the most well-known topics across the U.S and the world at large. This trend with increasing notoriety is due to mass adoption among the public and retail investors. Even with this opportunity though, there has been limited adoption from institutional investors and large banks. Slowly but surely, however, these banks have moved into the industry. One example is Goldman Sachs and their specific angle to crypto focusing on derivatives tied to digital assets. Specifically, Goldman has been seen trying to trade a bitcoin-linked instrument called a non-deliverable option. They’ve done this with crypto merchant bank Galaxy Digital.
This move is a remarkable step in the development of crypto markets for institutional investors because of the nature of OTC trades. As an OTC trade Goldman’s move differs from last year when they entered exchange-based bitcoin products. Many on the market have seen increasing interest in crypto derivatives markets from Banks as a sign that the asset is maturing enough to be taken seriously. According to Galaxy’s Co-President (the crypto firm Goldman is working with) Damien Vanderwilt “This trade represents the first step that banks have taken to offer direct, customizable exposures to the crypto market. What do you think about this next step in institutional adoption, and will it be affecting your crypto decisions?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.