Goldman Sachs makes milestone cryptoandel with Galaxy Digital

Goldman Sachs makes milestone cryptoandel with Galaxy Digital

Goldman Sachs has expanded the traded crypto products because the bank's expansion is the latest signal for the continued institutional introduction of digital assets.

Galaxy Digital Holdings has enabled its first out-of-the-counter (OTC) crypto transaction with Goldman in the form of a Bitcoin-Non deliverable option (NDO), as the company announced on Monday. The crypto company called it the first OTC crypto transaction of a large US bank.

An NDO is an option for which the underlying cannot be delivered. The settlement takes place instead in cash.

"We are pleased to have carried out our first bar cryptocurrency option trade with Galaxy," said Max Minton, Head of Digital Assets, in a statement on Monday. "This is an important development in our skills for digital assets and for the broader development of the investment class."

Further details of the transaction, such as the scope, are unclear. A spokesman for Goldman Sachs refused to comment.

Ben McMillan, founder and Chief Investment Officer from IDX Digital Assets, said that Goldman Sachs' OTC trade with Galaxy was "a big milestone" that is the way for more derivative products in the crypto area that are used to institutional investors.

"It also helps that Goldman is an established unit for the supervisory authorities, which means that investors at Goldman as a counterparty do not have the same concerns as with less established crypto units-no matter how well they are financed." McMillan said Blockworks.

"It is difficult to see why this step does not cause the other large Wall Street banks to follow Goldman's example."

Galaxy announced last June that it would act as a liquidity provider of Goldman Sachs for its Bitcoin futures block bikes on the CME. Galaxy CEO Mike Novogratz used to be a partner at Goldman.

MINTON said that the partnership was the result of more customers who wanted to secure access to cryptoassets, and pointed out Galaxy's “wide range of liquidity places and differentiated derivative skills that include the cryptocurrency ecosystem.

"We are pleased to further strengthen our relationship with Goldman and expect the transaction to open the door to other banks, the OTC as a channel for digital assets," said Damien Vanderwilt, co-president and head of the global markets of Galaxy, in a statement.

A Galaxy spokesman did not immediately answer a request for comment.

The bank had announced plans to offer Bitcoin derivatives and opened a special retail switch for cryptocurrencies last May. At that time it opened the trade with non -available forwards, a derivative that is bound to the price of Bitcoin and pays off in cash.

The trading platform from Galaxy Digital offers liquidity in more than 100 digital assets. The company works with around 700 institutional trading partners and built up 43 new relationships in the third quarter of last year.

Vanderwilt said during the Galaxy conference conference in November that institutions are increasingly forming crypto -specific teams and alternative asset managers are more involved in this area, but a lack of regulatory clarity still has an impact on how many of the world's largest asset managers can invest in the sector.

President Biden signed a implementation regulation at the beginning of this month, in which a number of government agencies were asked to examine the "responsible development" of digital assets.

Galaxy Digital will probably hold an investor conference on the results of the fourth quarter on March 31st.

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The contribution Goldman Sachs Makes 'Milestone' Crypto Trade with Galaxy Digital is not a financial advice.