Goldman Plans to Expand OTC Crypto Option Trading
Expand OTC Crypto Option Trading
Goldman Sachs’ entry into the crypto options market comes amid the growing interest in the asset class from big trading houses. While the firm doesn’t currently offer spot crypto trading, it provides access to Canadian and European exchange-traded products. The move signals an increasing interest in crypto by large trading houses. Even though Goldman doesn’t offer spot crypto trading, it does provide institutional players with access to cryptocurrencies through exchange-traded funds.
The launch of OTC crypto option trading is a step towards mainstream adoption of cryptocurrencies. Goldman did not engage directly with the underlying crypto in the transaction, but its trading partner Galaxy Investments is. As a liquidity provider, Galaxy was chosen by Goldman to execute the trade. At maturity, the trade will settle in cash. Bitcoin has long been considered a hedge against inflation, and the company’s entry into OTC crypto trading makes sense in light of current global inflation trends.
Decentralized OTC crypto exchange
While the majority of major traditional financial firms have shied away from cryptocurrencies, Goldman Sachs’ move signals a maturing asset class for hedge funds and institutional investors. Galaxy Digital, for example, has been a major liquidity provider for Goldman in its bitcoin futures block trades on the CME and the Chicago Mercantile Exchange. Goldman’s move into the crypto market marks a major shift in its strategy, and the company is leveraging this to build a desk to support its institutional clients.
Goldman Plans to Expand OTC Crypto Option Trading
According to Bloomberg, the Wall Street giant plans to offer over-the-counter trading of Ethereum options. After successfully trading Bitcoin over-the-counter last month, the investment bank wants to expand its crypto options offering to include Ether. However, the firm has a long history in Bitcoin options trading and believes that it will eventually offer cash-settled Ethereum options. If the firm is successful, the new addition to its existing crypto trading platform is a major step toward a more stable future for cryptocurrencies.
The company also plans to offer OTC trading for Ether and Bitcoin. It launched Bitcoin options trading in December last year, but did not announce a timeline for the launch. The company is credited with the growing popularity of Ether, which has been boosted by the proof-of-stake consensus. The launch of OTC Ether and Bitcoin options by Goldman Sachs is expected to be imminent, though it is not clear when the cryptocurrency will be made available for trading.
Coinbase Global Inc. is also a key player in the market. Its parent company, Coinbase, recently reported that institutional investors will trade $1.4 trillion in cryptocurrencies by 2021 and $120 billion in 2020. The rise in institutional interest in crypto is a positive sign. Goldman Sachs, once considered a bearish cryptocurrency analyst, has turned bullish in recent years. In 2018, Goldman introduced publicly traded derivatives linked to Bitcoin. Its DeFi report reveals that the firm plans to increase the trading volume of OTC crypto options.