Washington D.C., (Business News Report)|| Goldman Sachs Group Inc. has taken one step further in digital asset offering to Wall Street investors, in an apparent digital expansion.
Goldman Sachs worked to implement the first OTC trading of cryptocurrency options contracts. The bank traded non-deliverable Bitcoin options contracts.
Non-deliverable bitcoin options are meant to be cash-settled, in a transaction facilitated by Galaxy Digital Holdings, a crypto financial services company.
Cryptocurrency investors use options contracts to hedge against risk or increase returns. The volume of OTC deals is usually large and is negotiated privately.
The move marks the first such transaction by a major bank in the U.S., Galaxy Digital said.
The company expects the trade to “open the door for other banks considering OTC as a conduit for trading digital assets,” Damien Vanderwilt, co-president and head of global markets at Galaxy, said in the statement.
Since its creation in 2009, Bitcoin has been shunned by Wall Street banks.
Large banks are still not active in the cryptocurrency spot market, due to lack of trust of regulators and the “know your customer” rule.
However, some of these banks, including Goldman Sachs, are exploring the possibility of trading derivative contracts for cryptocurrency, according to a report published by Bloomberg.
“This is an important development in our digital assets capabilities and for the broader evolution of the asset class,” Max Minton, Goldman’s Asia Pacific head of digital assets, said.
Last year, Goldman opened the business of trading non-deliverable futures contracts, a type of derivative linked to bitcoin prices and settled in cash.
The bank also offers options contracts listed on the stock exchange and futures contracts for trading in the currencies Bitcoin and Ether.
Galaxy Digital provided liquidity for Goldman’s first transaction to trade Bitcoin futures on the Chicago Mercantile Exchange last year.