The banking giant executed the operation of a Bitcoin-linked instrument along with Galaxy Digital. The action represents a milestone in terms of crypto acceptance by traditional finance entities.
Wall Street heavyweight Goldman Sachs has become the first leading US bank to set a completion on (OTC) cryptocurrency sale.
This information got revealed by many news outlets, including CNBC and CoinDesk, on Monday. According to reports, Goldman managed to trade a Bitcoin-linked instrument named a ‘non-deliverable option’ alongside digital asset finance company Galaxy Digital. The trade is some kind of cash-settled cryptocurrency options trade.
An OTC trade, short for Over-The-Counter, refers to trading securities through a network of brokers rather than an exchange network, as Investopedia explains. This over-the-counter transaction may include investment instruments that got previously listed on the stock exchange or not.
A Great Discovery for the Cryptocurrency Market
New York-based Galaxy Digital revealed the discovery through a press release quoted by the media.
The firm highlighted that this event marks the first OTC crypto transaction by a prominent financial entity based in the US. Goldman Sachs keeps extending the tentacles of its crypto offerings, demonstrating the constant growth of its relationship with digital assets.
The move represents a significant evolution in the development of the crypto market and the role of institutional investors, in part due to the nature of OTC operations and because it represents a higher risk for the financial entity, as highlighted by CNBC. Galaxy co-chairman Damien Vanderwilt expressed that the banking giant’s decision also represents its evolution regarding the market.
Vanderwilt said in an interview that this transaction represents the beginning of a series of decisions that banks desire to make to offer more diverse and customizable exposures to the market for their customers.
Vanderwilt also highlighted that they’d love to keep consolidating their relationship with Goldman and hopes that the transaction will pave new paths for other entities to consider OTC as a vehicle for crypto trading.
Goldman and Galaxy
The news arrived a year after Goldman Sachs restarted its digital asset operative desk after having it inactive for three-year. CoinDesk reported that the desk, which plays a significant role in the bank’s US Global Markets division, got re-released because of the increasing requests from institutional clients.
On the other hand, the investment bank marks almost a year since it first contributed with Galaxy in June 2021 to carry out Bitcoin futures activities. Since then, the entity led by billionaire crypto financier Mike Novogratz has brought liquidity for block trades on CME Group.
Earlier this month, a filing with the US Securities and Exchange Commission (SEC) revealed that the bank has offered interested customers access to an Ethereum fund managed by Galaxy. The strategy is part of an agreement in which Goldman receives a fee for referring investors to the fund.
By: Jenson Nuñez
