This OTC deal was completed by a large Wall Street bank with the assistance of Galaxy Digital.
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Goldman Sachs Group Inc. entered into the first over-the-counter (OTC) trade in crypto options, another important step in increasing the supply of digital assets for Wall Street investors.
pegged to the price of bitcoin, which is paid by fiat – as part of a deal facilitated by Galaxy Digital Holdings Ltd., a cryptocurrency financial services company. Options are used by cryptocurrency investors to hedge risk and increase returns, and OTC trades are typically large, private transactions.
Damien Vanderwilt, Co-President and Head of Global Galaxy markets, stated that this event “will open the door for other banks considering OTC transactions as a channel for trading digital assets.” was shunned by Wall Street banks. The largest of them are still not active in the spot market of cryptocurrencies – they are hindered by regulatory uncertainty and KYC requirements. But some banks, including Goldman Sachs, are exploring the possibility of trading cryptocurrency derivatives.
Last year, Goldman Sachs opened trading in non-deliverable forwards, derivatives pegged to the price of bitcoin and settled in fiat. money. The bank also offers exchange options and futures for bitcoin and ether. In addition, the bank’s customers have the option to invest in cryptocurrencies.
Last year, Galaxy similarly provided liquidity for Goldman Sachs’ first Bitcoin futures trade on the Chicago Mercantile Exchange (CME). However, in a conversation with CNBC, a representative of the cryptocurrency bank noted that compared to the transaction on CME, the new operation carries more risk, since Goldman Sachs acts as the principal in the transaction.
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